19–006

108TH CONGRESS REPORT " HOUSE OF REPRESENTATIVES ! 1st Session 108–46

SOCIAL SECURITY PROTECTION ACT OF 2003

MARCH 24, 2003.—Committed to the Committee of the Whole House on the State 

of the Union and ordered to be printed 

Mr. THOMAS, from the Committee on Ways and Means, 

submitted the following 

R E P O R T 

[To accompany H.R. 743] 

[Including cost estimate of the Congressional Budget Office]

The Committee on Ways and Means, to whom was referred the 

bill (H.R. 743) to amend the Social Security Act and the Internal 

Revenue Code of 1986 to provide additional safeguards for Social 

Security and Supplemental Security Income beneficiaries with representative payees, to enhance program protections, and for other 

purposes, having considered the same, report favorably thereon 

with an amendment and recommend that the bill as amended do 

pass.

CONTENTS 

Page 

I. Summary and Background .............................................................................. 23

A. Purpose and Summary ........................................................................ 23

B. Background and Need for Legislation ................................................ 24

C. Legislative History .............................................................................. 25

II. Explanation of the Bill ..................................................................................... 27

Title I. Protection of Beneficiaries .................................................................. 27

Subtitle A—Representative Payees ......................................................... 27

A. Authority to reissue benefits misused by organizational representative payees (sec. 101 of the bill) ...................................................... 27

B. Oversight of representative payees (sec. 102 of the bill) .................. 28

C. Disqualification from service as representative payee of persons 

convicted of offenses resulting in imprisonment for more than 

1 year, or fleeing prosecution, custody, or confinement (sec. 103 

of the bill) ............................................................................................ 29

D. Fee forfeiture in case of benefit misuse by representative payees 

(sec. 104 of the bill) ............................................................................ 30

E. Liability of representative payees for misused benefits (sec. 105 

of the bill) ............................................................................................ 31

F. Authority to redirect delivery of benefit payments when a representative payee fails to provide required accounting (sec. 106 

of the bill) ............................................................................................ 31

2

Subtitle B—Enforcement .......................................................................... 32

G. Civil monetary penalty authority with respect to wrongful conversions by representative payees (sec. 111 of the bill) ....................... 32

Title II. Program Protections ........................................................................... 33

A. Civil monetary penalty authority with respect to knowing withholding of material facts (sec. 201 of the bill) .................................. 33

B. Issuance by Commissioner of Social Security of receipts to acknowledge submission of reports of changes in work or earnings 

status of disabled beneficiaries (sec. 202 of the bill) ....................... 34

C. Denial of Title II benefits to persons fleeing prosecution, custody, 

or confinement, and to persons violating probation or parole (sec. 

203 of the bill) .................................................................................... 35

D. Requirements relating to offers to provide for a fee a product 

or service available without charge from the Social Security Administration (sec. 204 of the bill) ...................................................... 36

E. Refusal to recognize certain individuals as claimant representatives (sec. 205 of the bill) ................................................................... 37

F. Penalty for corrupt or forcible interference with administration 

of Social Security Act (sec. 206 of the bill) ....................................... 38

G. Use of symbols, emblems, or names in reference to Social Security 

or Medicare (sec. 207 of the bill) ....................................................... 39

H. Disqualification from payment during trial work period upon conviction of fraudulent concealment of work activity (sec. 208 of 

the bill) ................................................................................................ 40

I. Authority for judicial orders of restitution (sec. 209 of the bill) ....... 41

Title III. Attorney Fee Payment System Improvements ............................... 42

A. Cap on attorney assessments (sec. 301 of the bill) ........................... 42

B. Extension of attorney fee payment system to Title XVI claims 

(sec. 302 of the bill) ............................................................................ 42

Title IV. Miscellaneous and Technical Amendments .................................... 43

Subtitle A—Amendments relating to the Ticket to Work and Work 

Incentives Improvement Act of 1999 ................................................ 43

A. Application of demonstration authority sunset date to new 

projects (sec. 401 of the bill) .............................................................. 43

B. Expansion of waiver authority available in connection with demonstration projects providing for reductions in disability insurance benefits based on earnings (sec. 402 of the bill) ..................... 44

C. Funding of demonstration projects provided for reductions in disability insurance benefits based on earnings (sec. 403 of the 

bill) ...................................................................................................... 45

D. Availability of Federal and State work incentive services to additional individuals (sec. 404 of the bill) ............................................. 46

E. Technical amendment clarifying treatment for certain purposes 

of individual work plans under the Ticket to Work and SelfSufficiency Program (sec. 405 of the bill) ......................................... 47

Subtitle B—Miscellaneous Amendments ................................................. 49

F. Elimination of transcript requirement in remand cases fully favorable to the claimant (sec. 411 of the bill) ......................................... 49

G. Nonpayment of benefits upon removal from the United States 

(sec. 412 of the bill) ............................................................................ 49

H. Reinstatement of certain reporting requirements (sec. 413 of the 

bill) ...................................................................................................... 50

I. Clarification of definitions regarding certain survivor benefits (sec. 

414 of the bill) .................................................................................... 50

J. Clarification respecting the FICA and SECA tax exemptions for 

an individual whose earnings are subject to the laws of a totalization agreement partner (sec. 415 of the bill) ............................... 51

K. Coverage under divided retirement system for public employees 

in Kentucky (sec. 416 of the bill) ...................................................... 52

L. Compensation for the Social Security Advisory Board (sec. 417 

of the bill) ............................................................................................ 53

M. 60-month period of employment requirement for application of 

government pension offset exemption (sec. 418 of the bill) ............ 54

Subtitle C—Technical Amendments ........................................................ 55

N. Technical correction relating to responsible agency head (sec. 421 

of the bill) ............................................................................................ 55

O. Technical correction relating to retirement benefits of ministers 

(sec. 422 of the bill) ............................................................................ 56

3

P. Technical corrections relating to domestic employment (sec. 423 

of the bill) ............................................................................................ 56

Q. Technical corrections of outdated references (sec. 424 of the bill) .. 57

R. Technical correction respecting self-employment income in community property States (sec. 425 of the bill) .................................... 57

III. Votes of the Committee .................................................................................... 58

IV. Budget Effects of the Bill ................................................................................. 60

A. Committee Estimate of Budgetary Effects ........................................ 60

B. Statement Regarding New Budget Authority and Tax Expenditures Budget Authority ...................................................................... 60

C. Cost Estimate Prepared by the Congressional Budget Office .......... 60

D. Macroeconomic Impact Analysis ........................................................ 70

V. Other Matters To Be Discussed Under the Rules of the House ................... 70

A. Committee Oversight Findings and Recommendations .................... 70

B. Statement of General Performance Goals and Objectives ................ 70

C. Constitutional Authority Statement .................................................. 70

D. Information Relating to Unfunded Mandates ................................... 71

E. Applicability of House Rule XXI 5(b) ................................................. 71

F. Tax Complexity Analysis ..................................................................... 71

VI. Changes in Existing Law Made by the Bill, as Reported ............................. 71

The amendment is as follows: 

Strike all after the enacting clause and insert the following:

SECTION 1. SHORT TITLE AND TABLE OF CONTENTS. 

(a) SHORT TITLE.—This Act may be cited as the ‘‘Social Security Protection Act 

of 2003’’. 

(b) TABLE OF CONTENTS.—The table of contents is as follows:

Sec. 1. Short title and table of contents. 

TITLE I—PROTECTION OF BENEFICIARIES 

Subtitle A—Representative Payees 

Sec. 101. Authority to reissue benefits misused by organizational representative payees. 

Sec. 102. Oversight of representative payees. 

Sec. 103. Disqualification from service as representative payee of persons convicted of offenses resulting in imprisonment for more than 1 year or fleeing prosecution, custody, or confinement. 

Sec. 104. Fee forfeiture in case of benefit misuse by representative payees. 

Sec. 105. Liability of representative payees for misused benefits. 

Sec. 106. Authority to redirect delivery of benefit payments when a representative payee fails to provide required accounting.

Subtitle B—Enforcement 

Sec. 111. Civil monetary penalty authority with respect to wrongful conversions by representative payees. 

TITLE II—PROGRAM PROTECTIONS 

Sec. 201. Civil monetary penalty authority with respect to knowing withholding of material facts. 

Sec. 202. Issuance by Commissioner of Social Security of receipts to acknowledge submission of reports of 

changes in work or earnings status of disabled beneficiaries. 

Sec. 203. Denial of title II benefits to persons fleeing prosecution, custody, or confinement, and to persons violating probation or parole. 

Sec. 204. Requirements relating to offers to provide for a fee a product or service available without charge from 

the Social Security Administration. 

Sec. 205. Refusal to recognize certain individuals as claimant representatives. 

Sec. 206. Penalty for corrupt or forcible interference with administration of Social Security Act. 

Sec. 207. Use of symbols, emblems, or names in reference to social security or medicare. 

Sec. 208. Disqualification from payment during trial work period upon conviction of fraudulent concealment of 

work activity. 

Sec. 209. Authority for judicial orders of restitution. 

TITLE III—ATTORNEY FEE PAYMENT SYSTEM IMPROVEMENTS 

Sec. 301. Cap on attorney assessments. 

Sec. 302. Extension of attorney fee payment system to title XVI claims. 

TITLE IV—MISCELLANEOUS AND TECHNICAL AMENDMENTS 

Subtitle A—Amendments Relating to the Ticket to Work and Work Incentives Improvement Act of 1999

Sec. 401. Application of demonstration authority sunset date to new projects. 

Sec. 402. Expansion of waiver authority available in connection with demonstration projects providing for reductions in disability insurance benefits based on earnings. 

Sec. 403. Funding of demonstration projects provided for reductions in disability insurance benefits based on 

earnings. 

Sec. 404. Availability of Federal and State work incentive services to additional individuals. 

Sec. 405. Technical amendment clarifying treatment for certain purposes of individual work plans under the 

Ticket to Work and Self-Sufficiency Program. 

Subtitle B—Miscellaneous Amendments 

Sec. 411. Elimination of transcript requirement in remand cases fully favorable to the claimant. 

4

Sec. 412. Nonpayment of benefits upon removal from the United States. 

Sec. 413. Reinstatement of certain reporting requirements. 

Sec. 414. Clarification of definitions regarding certain survivor benefits. 

Sec. 415. Clarification respecting the FICA and SECA tax exemptions for an individual whose earnings are subject to the laws of a totalization agreement partner. 

Sec. 416. Coverage under divided retirement system for public employees in Kentucky. 

Sec. 417. Compensation for the Social Security Advisory Board. 

Sec. 418. 60-month period of employment requirement for application of government pension offset exemption. 

Subtitle C—Technical Amendments 

Sec. 421. Technical correction relating to responsible agency head. 

Sec. 422. Technical correction relating to retirement benefits of ministers. 

Sec. 423. Technical corrections relating to domestic employment. 

Sec. 424. Technical corrections of outdated references. 

Sec. 425. Technical correction respecting self-employment income in community property States.

TITLE I—PROTECTION OF BENEFICIARIES 

Subtitle A—Representative Payees 

SEC. 101. AUTHORITY TO REISSUE BENEFITS MISUSED BY ORGANIZATIONAL REPRESENTATIVE PAYEES. 

(a) TITLE II AMENDMENTS.— (1) REISSUANCE OF BENEFITS.—Section 205(j)(5) of the Social Security Act (42 

U.S.C. 405(j)(5)) is amended by inserting after the first sentence the following 

new sentences: ‘‘In any case in which a representative payee that— ‘‘(A) is not an individual (regardless of whether it is a ‘qualified organization’ within the meaning of paragraph (4)(B)); or ‘‘(B) is an individual who, for any month during a period when misuse occurs, 

serves 15 or more individuals who are beneficiaries under this title, title VIII, 

title XVI, or any combination of such titles; 

misuses all or part of an individual’s benefit paid to such representative payee, the 

Commissioner of Social Security shall certify for payment to the beneficiary or the 

beneficiary’s alternative representative payee an amount equal to the amount of 

such benefit so misused. The provisions of this paragraph are subject to the limitations of paragraph (7)(B).’’. (2) MISUSE OF BENEFITS DEFINED.—Section 205(j) of such Act (42 U.S.C. 

405(j)) is amended by adding at the end the following new paragraph: ‘‘(8) For purposes of this subsection, misuse of benefits by a representative payee 

occurs in any case in which the representative payee receives payment under this 

title for the use and benefit of another person and converts such payment, or any 

part thereof, to a use other than for the use and benefit of such other person. The 

Commissioner of Social Security may prescribe by regulation the meaning of the 

term ‘use and benefit’ for purposes of this paragraph.’’. (b) TITLE VIII AMENDMENTS.— (1) REISSUANCE OF BENEFITS.—Section 807(i) of the Social Security Act (42 

U.S.C. 1007(i)) (as amended by section 209(b)(1) of this Act) is amended further 

by inserting after the first sentence the following new sentences: ‘‘In any case 

in which a representative payee that—

‘‘(A) is not an individual; or 

‘‘(B) is an individual who, for any month during a period when misuse 

occurs, serves 15 or more individuals who are beneficiaries under this title, 

title II, title XVI, or any combination of such titles; 

misuses all or part of an individual’s benefit paid to such representative payee, 

the Commissioner of Social Security shall pay to the beneficiary or the beneficiary’s alternative representative payee an amount equal to the amount of 

such benefit so misused. The provisions of this paragraph are subject to the limitations of subsection (l)(2).’’. 

(2) MISUSE OF BENEFITS DEFINED.—Section 807 of such Act (42 U.S.C. 1007) 

is amended by adding at the end the following new subsection: 

‘‘(j) MISUSE OF BENEFITS.—For purposes of this title, misuse of benefits by a representative payee occurs in any case in which the representative payee receives payment under this title for the use and benefit of another person under this title and 

converts such payment, or any part thereof, to a use other than for the use and benefit of such person. The Commissioner of Social Security may prescribe by regulation the meaning of the term ‘use and benefit’ for purposes of this subsection.’’. 

(3) TECHNICAL AMENDMENT.—Section 807(a) of such Act (42 U.S.C. 1007(a)) 

is amended, in the first sentence, by striking ‘‘for his or her benefit’’ and inserting ‘‘for his or her use and benefit’’. 

(c) TITLE XVI AMENDMENTS.—

5

(1) REISSUANCE OF BENEFITS.—Section 1631(a)(2)(E) of such Act (42 U.S.C. 

1383(a)(2)(E)) is amended by inserting after the first sentence the following new 

sentences: ‘‘In any case in which a representative payee that—

‘‘(i) is not an individual (regardless of whether it is a ‘qualified organization’

within the meaning of subparagraph (D)(ii)); or 

‘‘(ii) is an individual who, for any month during a period when misuse occurs, 

serves 15 or more individuals who are beneficiaries under this title, title II, title 

VIII, or any combination of such titles; 

misuses all or part of an individual’s benefit paid to the representative payee, the 

Commissioner of Social Security shall pay to the beneficiary or the beneficiary’s alternative representative payee an amount equal to the amount of the benefit so misused. The provisions of this subparagraph are subject to the limitations of subparagraph (H)(ii).’’. 

(2) EXCLUSION OF REISSUED BENEFITS FROM RESOURCES.—Section 1613(a) of 

such Act (42 U.S.C. 1382b(a)) is amended—

(A) in paragraph (12), by striking ‘‘and’’ at the end; 

(B) in paragraph (13), by striking the period and inserting ‘‘; and’’; and 

(C) by inserting after paragraph (13) the following new paragraph: 

‘‘(14) for the 9-month period beginning after the month in which received, any 

amount received by such individual (or spouse) or any other person whose income is deemed to be included in such individual’s (or spouse’s) income for purposes of this title as restitution for benefits under this title, title II, or title VIII 

that a representative payee of such individual (or spouse) or such other person 

under section 205(j), 807, or 1631(a)(2) has misused.’’. 

(3) MISUSE OF BENEFITS DEFINED.—Section 1631(a)(2)(A) of such Act (42 

U.S.C. 1383(a)(2)(A)) is amended by adding at the end the following new clause: 

‘‘(iv) For purposes of this paragraph, misuse of benefits by a representative payee 

occurs in any case in which the representative payee receives payment under this 

title for the use and benefit of another person and converts such payment, or any 

part thereof, to a use other than for the use and benefit of such other person. The 

Commissioner of Social Security may prescribe by regulation the meaning of the 

term ‘use and benefit’ for purposes of this clause.’’. 

(d) EFFECTIVE DATE.—The amendments made by this section shall apply to any 

case of benefit misuse by a representative payee with respect to which the Commissioner makes the determination of misuse on or after January 1, 1995. 

SEC. 102. OVERSIGHT OF REPRESENTATIVE PAYEES. 

(a) CERTIFICATION OF BONDING AND LICENSING REQUIREMENTS FOR NONGOVERNMENTAL ORGANIZATIONAL REPRESENTATIVE PAYEES.—

(1) TITLE II AMENDMENTS.—Section 205(j) of the Social Security Act (42 U.S.C. 

405(j)) is amended—

(A) in paragraph (2)(C)(v), by striking ‘‘a community-based nonprofit social service agency licensed or bonded by the State’’ in subclause (I) and inserting ‘‘a certified community-based nonprofit social service agency (as defined in paragraph (9))’’; 

(B) in paragraph (3)(F), by striking ‘‘community-based nonprofit social 

service agencies’’ and inserting ‘‘certified community-based nonprofit social 

service agencies (as defined in paragraph (9))’’; 

(C) in paragraph (4)(B), by striking ‘‘any community-based nonprofit social service agency which is bonded or licensed in each State in which it 

serves as a representative payee’’ and inserting ‘‘any certified communitybased nonprofit social service agency (as defined in paragraph (9))’’; and 

(D) by adding after paragraph (8) (as added by section 101(a)(2) of this 

Act) the following new paragraph: 

‘‘(9) For purposes of this subsection, the term ‘certified community-based nonprofit 

social service agency’ means a community-based nonprofit social service agency 

which is in compliance with requirements, under regulations which shall be prescribed by the Commissioner, for annual certification to the Commissioner that it 

is bonded in accordance with requirements specified by the Commissioner and that 

it is licensed in each State in which it serves as a representative payee (if licensing 

is available in such State) in accordance with requirements specified by the Commissioner. Any such annual certification shall include a copy of any independent 

audit on such agency which may have been performed since the previous certification.’’. 

(2) TITLE XVI AMENDMENTS.—Section 1631(a)(2) of such Act (42 U.S.C. 

1383(a)(2)) is amended—

(A) in subparagraph (B)(vii), by striking ‘‘a community-based nonprofit social service agency licensed or bonded by the State’’ in subclause (I) and inVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00005 Fmt 6659 Sfmt 6621 E:\HR\OC\HR046.XXX HR046
6

serting ‘‘a certified community-based nonprofit social service agency (as defined in subparagraph (I))’’; 

(B) in subparagraph (D)(ii)— (i) by striking ‘‘or any community-based’’ and all that follows through ‘‘in accordance’’ in subclause (II) and inserting ‘‘or any certified community-based nonprofit social service agency (as defined in subparagraph 

(I)), if the agency, in accordance’’; 

(ii) by redesignating items (aa) and (bb) as subclauses (I) and (II), respectively (and adjusting the margination accordingly); and 

(iii) by striking ‘‘subclause (II)(bb)’’ and inserting ‘‘subclause (II)’’; and 

(C) by adding at the end the following new subparagraph: ‘‘(I) For purposes of this paragraph, the term ‘certified community-based nonprofit 

social service agency’ means a community-based nonprofit social service agency 

which is in compliance with requirements, under regulations which shall be prescribed by the Commissioner, for annual certification to the Commissioner that it 

is bonded in accordance with requirements specified by the Commissioner and that 

it is licensed in each State in which it serves as a representative payee (if licensing 

is available in the State) in accordance with requirements specified by the Commissioner. Any such annual certification shall include a copy of any independent audit 

on the agency which may have been performed since the previous certification.’’. (3) EFFECTIVE DATE.—The amendments made by this subsection shall take effect on the first day of the thirteenth month beginning after the date of the enactment of this Act. 

(b) PERIODIC ONSITE REVIEW.—

(1) TITLE II AMENDMENT.—Section 205(j)(6) of such Act (42 U.S.C. 405(j)(6)) 

is amended to read as follows: 

‘‘(6)(A) In addition to such other reviews of representative payees as the Commissioner of Social Security may otherwise conduct, the Commissioner shall provide for 

the periodic onsite review of any person or agency located in the United States that 

receives the benefits payable under this title (alone or in combination with benefits 

payable under title VIII or title XVI) to another individual pursuant to the appointment of such person or agency as a representative payee under this subsection, section 807, or section 1631(a)(2) in any case in which—

‘‘(i) the representative payee is a person who serves in that capacity with respect to 15 or more such individuals; 

‘‘(ii) the representative payee is a certified community-based nonprofit social 

service agency (as defined in paragraph (9) of this subsection or section 

1631(a)(2)(I)); or 

‘‘(iii) the representative payee is an agency (other than an agency described 

in clause (ii)) that serves in that capacity with respect to 50 or more such individuals. 

‘‘(B) Within 120 days after the end of each fiscal year, the Commissioner shall 

submit to the Committee on Ways and Means of the House of Representatives and 

the Committee on Finance of the Senate a report on the results of periodic onsite 

reviews conducted during the fiscal year pursuant to subparagraph (A) and of any 

other reviews of representative payees conducted during such fiscal year in connection with benefits under this title. Each such report shall describe in detail all problems identified in such reviews and any corrective action taken or planned to be 

taken to correct such problems, and shall include—

‘‘(i) the number of such reviews; 

‘‘(ii) the results of such reviews; 

‘‘(iii) the number of cases in which the representative payee was changed and 

why; 

‘‘(iv) the number of cases involving the exercise of expedited, targeted oversight of the representative payee by the Commissioner conducted upon receipt 

of an allegation of misuse of funds, failure to pay a vendor, or a similar irregularity; 

‘‘(v) the number of cases discovered in which there was a misuse of funds; 

‘‘(vi) how any such cases of misuse of funds were dealt with by the Commissioner; 

‘‘(vii) the final disposition of such cases of misuse of funds, including any 

criminal penalties imposed; and 

‘‘(viii) such other information as the Commissioner deems appropriate.’’. 

(2) TITLE VIII AMENDMENT.—Section 807 of such Act (as amended by section 

101(b)(2) of this Act) is amended further by adding at the end the following new 

subsection: 

‘‘(k) PERIODIC ONSITE REVIEW.—(1) In addition to such other reviews of representative payees as the Commissioner of Social Security may otherwise conduct, the 

Commissioner may provide for the periodic onsite review of any person or agency 

7

that receives the benefits payable under this title (alone or in combination with benefits payable under title II or title XVI) to another individual pursuant to the appointment of such person or agency as a representative payee under this section, 

section 205(j), or section 1631(a)(2) in any case in which— ‘‘(A) the representative payee is a person who serves in that capacity with respect to 15 or more such individuals; or ‘‘(B) the representative payee is an agency that serves in that capacity with 

respect to 50 or more such individuals. ‘‘(2) Within 120 days after the end of each fiscal year, the Commissioner shall submit to the Committee on Ways and Means of the House of Representatives and the 

Committee on Finance of the Senate a report on the results of periodic onsite reviews conducted during the fiscal year pursuant to paragraph (1) and of any other 

reviews of representative payees conducted during such fiscal year in connection 

with benefits under this title. Each such report shall describe in detail all problems 

identified in such reviews and any corrective action taken or planned to be taken 

to correct such problems, and shall include— ‘‘(A) the number of such reviews; 

‘‘(B) the results of such reviews; 

‘‘(C) the number of cases in which the representative payee was changed and 

why; ‘‘(D) the number of cases involving the exercise of expedited, targeted oversight of the representative payee by the Commissioner conducted upon receipt 

of an allegation of misuse of funds, failure to pay a vendor, or a similar irregularity; 

‘‘(E) the number of cases discovered in which there was a misuse of funds; 

‘‘(F) how any such cases of misuse of funds were dealt with by the Commissioner; 

‘‘(G) the final disposition of such cases of misuse of funds, including any criminal penalties imposed; and 

‘‘(H) such other information as the Commissioner deems appropriate.’’. 

(3) TITLE XVI AMENDMENT.—Section 1631(a)(2)(G) of such Act (42 U.S.C. 

1383(a)(2)(G)) is amended to read as follows: 

‘‘(G)(i) In addition to such other reviews of representative payees as the Commissioner of Social Security may otherwise conduct, the Commissioner shall provide for 

the periodic onsite review of any person or agency that receives the benefits payable 

under this title (alone or in combination with benefits payable under title II or title 

VIII) to another individual pursuant to the appointment of the person or agency as 

a representative payee under this paragraph, section 205(j), or section 807 in any 

case in which—

‘‘(I) the representative payee is a person who serves in that capacity with respect to 15 or more such individuals; 

‘‘(II) the representative payee is a certified community-based nonprofit social 

service agency (as defined in subparagraph (I) of this paragraph or section 

205(j)(9)); or 

‘‘(III) the representative payee is an agency (other than an agency described 

in subclause (II)) that serves in that capacity with respect to 50 or more such 

individuals. 

‘‘(ii) Within 120 days after the end of each fiscal year, the Commissioner shall 

submit to the Committee on Ways and Means of the House of Representatives and 

the Committee on Finance of the Senate a report on the results of periodic onsite 

reviews conducted during the fiscal year pursuant to clause (i) and of any other reviews of representative payees conducted during such fiscal year in connection with 

benefits under this title. Each such report shall describe in detail all problems identified in the reviews and any corrective action taken or planned to be taken to correct the problems, and shall include—

‘‘(I) the number of the reviews; 

‘‘(II) the results of such reviews; 

‘‘(III) the number of cases in which the representative payee was changed and 

why; 

‘‘(IV) the number of cases involving the exercise of expedited, targeted oversight of the representative payee by the Commissioner conducted upon receipt 

of an allegation of misuse of funds, failure to pay a vendor, or a similar irregularity; 

‘‘(V) the number of cases discovered in which there was a misuse of funds; 

‘‘(VI) how any such cases of misuse of funds were dealt with by the Commissioner; 

‘‘(VII) the final disposition of such cases of misuse of funds, including any 

criminal penalties imposed; and 

‘‘(VIII) such other information as the Commissioner deems appropriate.’’. 

8

SEC. 103. DISQUALIFICATION FROM SERVICE AS REPRESENTATIVE PAYEE OF PERSONS CONVICTED OF OFFENSES RESULTING IN IMPRISONMENT FOR MORE THAN 1 YEAR OR 

FLEEING PROSECUTION, CUSTODY, OR CONFINEMENT. 

(a) TITLE II AMENDMENTS.—Section 205(j)(2) of the Social Security Act (42 U.S.C. 

405(j)(2)) is amended—

(1) in subparagraph (B)(i)—

(A) by striking ‘‘and’’ at the end of subclause (III); 

(B) by redesignating subclause (IV) as subclause (VI); and 

(C) by inserting after subclause (III) the following new subclauses: 

‘‘(IV) obtain information concerning whether such person has been convicted 

of any other offense under Federal or State law which resulted in imprisonment 

for more than 1 year, 

‘‘(V) obtain information concerning whether such person is a person described 

in section 202(x)(1)(A)(iv), and’’; 

(2) in subparagraph (B), by adding at the end the following new clause: 

‘‘(iii) Notwithstanding the provisions of section 552a of title 5, United States Code, 

or any other provision of Federal or State law (other than section 6103 of the Internal Revenue Code of 1986 and section 1106(c) of this Act), the Commissioner shall 

furnish any Federal, State, or local law enforcement officer, upon the written request of the officer, with the current address, social security account number, and 

photograph (if applicable) of any person investigated under this paragraph, if the 

officer furnishes the Commissioner with the name of such person and such other 

identifying information as may reasonably be required by the Commissioner to establish the unique identity of such person, and notifies the Commissioner that—

‘‘(I) such person is described in section 202(x)(1)(A)(iv), 

‘‘(II) such person has information that is necessary for the officer to conduct 

the officer’s official duties, and 

‘‘(III) the location or apprehension of such person is within the officer’s official 

duties.’’; 

(3) in subparagraph (C)(i)(II), by striking ‘‘subparagraph (B)(i)(IV),,’’ and inserting ‘‘subparagraph (B)(i)(VI)’’ and striking ‘‘section 1631(a)(2)(B)(ii)(IV)’’ and 

inserting ‘‘section 1631(a)(2)(B)(ii)(VI)’’; and 

(4) in subparagraph (C)(i)—

(A) by striking ‘‘or’’ at the end of subclause (II); 

(B) by striking the period at the end of subclause (III) and inserting a 

comma; and 

(C) by adding at the end the following new subclauses: 

‘‘(IV) such person has previously been convicted as described in subparagraph 

(B)(i)(IV), unless the Commissioner determines that such certification would be 

appropriate notwithstanding such conviction, or 

‘‘(V) such person is person described in section 202(x)(1)(A)(iv).’’. 

(b) TITLE VIII AMENDMENTS.—Section 807 of such Act (42 U.S.C. 1007) is amended—

(1) in subsection (b)(2)—

(A) by striking ‘‘and’’ at the end of subparagraph (C); 

(B) by redesignating subparagraph (D) as subparagraph (F); and 

(C) by inserting after subparagraph (C) the following new subparagraphs: 

‘‘(D) obtain information concerning whether such person has been convicted of any other offense under Federal or State law which resulted in imprisonment for more than 1 year; 

‘‘(E) obtain information concerning whether such person is a person described in section 804(a)(2); and’’; 

(2) in subsection (b), by adding at the end the following new paragraph: 

‘‘(3) Notwithstanding the provisions of section 552a of title 5, United States 

Code, or any other provision of Federal or State law (other than section 6103 

of the Internal Revenue Code of 1986 and section 1106(c) of this Act), the Commissioner shall furnish any Federal, State, or local law enforcement officer, 

upon the written request of the officer, with the current address, social security 

account number, and photograph (if applicable) of any person investigated 

under this subsection, if the officer furnishes the Commissioner with the name 

of such person and such other identifying information as may reasonably be required by the Commissioner to establish the unique identity of such person, and 

notifies the Commissioner that—

‘‘(A) such person is described in section 804(a)(2), 

‘‘(B) such person has information that is necessary for the officer to conduct the officer’s official duties, and 

‘‘(C) the location or apprehension of such person is within the officer’s official duties.’’; and 

(3) in subsection (d)(1)—

9

(A) by striking ‘‘or’’ at the end of subparagraph (B); 

(B) by striking the period at the end of subparagraph (C) and inserting 

a semicolon; and 

(C) by adding at the end the following new subparagraphs: 

‘‘(D) such person has previously been convicted as described in subsection 

(b)(2)(D), unless the Commissioner determines that such payment would be 

appropriate notwithstanding such conviction; or 

‘‘(E) such person is a person described in section 804(a)(2).’’. 

(c) TITLE XVI AMENDMENTS.—Section 1631(a)(2)(B) of such Act (42 U.S.C. 

1383(a)(2)(B)) is amended—

(1) in clause (ii)—

(A) by striking ‘‘and’’ at the end of subclause (III); 

(B) by redesignating subclause (IV) as subclause (VI); and 

(C) by inserting after subclause (III) the following new subclauses: 

‘‘(IV) obtain information concerning whether the person has been convicted of 

any other offense under Federal or State law which resulted in imprisonment 

for more than 1 year; 

‘‘(V) obtain information concerning whether such person is a person described 

in section 1611(e)(4)(A); and’’; 

(2) in clause (iii)(II)—

(A) by striking ‘‘clause (ii)(IV)’’ and inserting ‘‘clause (ii)(VI)’’; and 

(B) by striking ‘‘section 205(j)(2)(B)(i)(IV)’’ and inserting ‘‘section 

205(j)(2)(B)(i)(VI)’’; 

(3) in clause (iii)—

(A) by striking ‘‘or’’ at the end of subclause (II); 

(B) by striking the period at the end of subclause (III) and inserting a 

semicolon; and 

(C) by adding at the end the following new subclauses: 

‘‘(IV) the person has previously been convicted as described in clause (ii)(IV) 

of this subparagraph, unless the Commissioner determines that the payment 

would be appropriate notwithstanding the conviction; or 

‘‘(V) such person is a person described in section 1611(e)(4)(A).’’; and 

(4) by adding at the end the following new clause: 

‘‘(xiv) Notwithstanding the provisions of section 552a of title 5, United States 

Code, or any other provision of Federal or State law (other than section 6103 of the 

Internal Revenue Code of 1986 and section 1106(c) of this Act), the Commissioner 

shall furnish any Federal, State, or local law enforcement officer, upon the written 

request of the officer, with the current address, social security account number, and 

photograph (if applicable) of any person investigated under this subparagraph, if the 

officer furnishes the Commissioner with the name of such person and such other 

identifying information as may reasonably be required by the Commissioner to establish the unique identity of such person, and notifies the Commissioner that—

‘‘(I) such person is described in section 1611(e)(4)(A), 

‘‘(II) such person has information that is necessary for the officer to conduct 

the officer’s official duties, and 

‘‘(III) the location or apprehension of such person is within the officer’s official 

duties.’’. 

(d) EFFECTIVE DATE.—The amendments made by this section shall take effect on 

the first day of the thirteenth month beginning after the date of the enactment of 

this Act. 

(e) REPORT TO THE CONGRESS.—The Commissioner of Social Security, in consultation with the Inspector General of the Social Security Administration, shall prepare 

a report evaluating whether the existing procedures and reviews for the qualification (including disqualification) of representative payees are sufficient to enable the 

Commissioner to protect benefits from being misused by representative payees. The 

Commissioner shall submit the report to the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the Senate no later than 

270 days after the date of the enactment of this Act. The Commissioner shall include in such report any recommendations that the Commissioner considers appropriate. 

SEC. 104. FEE FORFEITURE IN CASE OF BENEFIT MISUSE BY REPRESENTATIVE PAYEES. 

(a) TITLE II AMENDMENTS.—Section 205(j)(4)(A)(i) of the Social Security Act (42 

U.S.C. 405(j)(4)(A)(i)) is amended—

(1) in the first sentence, by striking ‘‘A’’ and inserting ‘‘Except as provided in 

the next sentence, a’’; and 

(2) in the second sentence, by striking ‘‘The Secretary’’ and inserting the following: 

10

‘‘A qualified organization may not collect a fee from an individual for any month 

with respect to which the Commissioner of Social Security or a court of competent 

jurisdiction has determined that the organization misused all or part of the individual’s benefit, and any amount so collected by the qualified organization for such 

month shall be treated as a misused part of the individual’s benefit for purposes 

of paragraphs (5) and (6). The Commissioner’’. 

(b) TITLE XVI AMENDMENTS.—Section 1631(a)(2)(D)(i) of such Act (42 U.S.C. 

1383(a)(2)(D)(i)) is amended—

(1) in the first sentence, by striking ‘‘A’’ and inserting ‘‘Except as provided in 

the next sentence, a’’; and 

(2) in the second sentence, by striking ‘‘The Commissioner’’ and inserting the 

following: ‘‘A qualified organization may not collect a fee from an individual for 

any month with respect to which the Commissioner of Social Security or a court 

of competent jurisdiction has determined that the organization misused all or 

part of the individual’s benefit, and any amount so collected by the qualified organization for such month shall be treated as a misused part of the individual’s 

benefit for purposes of subparagraphs (E) and (F). The Commissioner’’. (c) EFFECTIVE DATE.—The amendments made by this section shall apply to any 

month involving benefit misuse by a representative payee in any case with respect 

to which the Commissioner of Social Security or a court of competent jurisdiction 

makes the determination of misuse after 180 days after the date of the enactment 

of this Act. 

SEC. 105. LIABILITY OF REPRESENTATIVE PAYEES FOR MISUSED BENEFITS. 

(a) TITLE II AMENDMENTS.—Section 205(j) of the Social Security Act (42 U.S.C. 

405(j)) (as amended by sections 101 and 102) is amended further—

(1) by redesignating paragraphs (7), (8), and (9) as paragraphs (8), (9), and 

(10), respectively; 

(2) in paragraphs (2)(C)(v), (3)(F), and (4)(B), by striking ‘‘paragraph (9)’’ and 

inserting ‘‘paragraph (10)’’; 

(3) in paragraph (6)(A)(ii), by striking ‘‘paragraph (9)’’ and inserting ‘‘paragraph (10)’’; and 

(4) by inserting after paragraph (6) the following new paragraph: 

‘‘(7)(A) If the Commissioner of Social Security or a court of competent jurisdiction 

determines that a representative payee that is not a Federal, State, or local government agency has misused all or part of an individual’s benefit that was paid to such 

representative payee under this subsection, the representative payee shall be liable 

for the amount misused, and such amount (to the extent not repaid by the representative payee) shall be treated as an overpayment of benefits under this title 

to the representative payee for all purposes of this Act and related laws pertaining 

to the recovery of such overpayments. Subject to subparagraph (B), upon recovering 

all or any part of such amount, the Commissioner shall certify an amount equal to 

the recovered amount for payment to such individual or such individual’s alternative representative payee. 

‘‘(B) The total of the amount certified for payment to such individual or such individual’s alternative representative payee under subparagraph (A) and the amount 

certified for payment under paragraph (5) may not exceed the total benefit amount 

misused by the representative payee with respect to such individual.’’. 

(b) TITLE VIII AMENDMENT.—Section 807 of such Act (as amended by section 

102(b)(2)) is amended further by adding at the end the following new subsection: 

‘‘(l) LIABILITY FOR MISUSED AMOUNTS.—

‘‘(1) IN GENERAL.—If the Commissioner of Social Security or a court of competent jurisdiction determines that a representative payee that is not a Federal, 

State, or local government agency has misused all or part of a qualified individual’s benefit that was paid to such representative payee under this section, the 

representative payee shall be liable for the amount misused, and such amount 

(to the extent not repaid by the representative payee) shall be treated as an 

overpayment of benefits under this title to the representative payee for all purposes of this Act and related laws pertaining to the recovery of such overpayments. Subject to paragraph (2), upon recovering all or any part of such 

amount, the Commissioner shall make payment of an amount equal to the recovered amount to such qualified individual or such qualified individual’s alternative representative payee. 

‘‘(2) LIMITATION.—The total of the amount paid to such individual or such individual’s alternative representative payee under paragraph (1) and the amount 

paid under subsection (i) may not exceed the total benefit amount misused by 

the representative payee with respect to such individual.’’. 

(c) TITLE XVI AMENDMENTS.—Section 1631(a)(2) of such Act (42 U.S.C. 1383(a)(2)) 

(as amended by section 102(b)(3)) is amended further—

11

(1) in subparagraph (G)(i)(II), by striking ‘‘section 205(j)(9)’’ and inserting ‘‘section 205(j)(10)’’; and 

(2) by striking subparagraph (H) and inserting the following: ‘‘(H)(i) If the Commissioner of Social Security or a court of competent jurisdiction 

determines that a representative payee that is not a Federal, State, or local government agency has misused all or part of an individual’s benefit that was paid to the 

representative payee under this paragraph, the representative payee shall be liable 

for the amount misused, and the amount (to the extent not repaid by the representative payee) shall be treated as an overpayment of benefits under this title to the 

representative payee for all purposes of this Act and related laws pertaining to the 

recovery of the overpayments. Subject to clause (ii), upon recovering all or any part 

of the amount, the Commissioner shall make payment of an amount equal to the 

recovered amount to such individual or such individual’s alternative representative 

payee. 

‘‘(ii) The total of the amount paid to such individual or such individual’s alternative representative payee under clause (i) and the amount paid under subparagraph (E) may not exceed the total benefit amount misused by the representative 

payee with respect to such individual.’’. 

(d) EFFECTIVE DATE.—The amendments made by this section shall apply to benefit misuse by a representative payee in any case with respect to which the Commissioner of Social Security or a court of competent jurisdiction makes the determination of misuse after 180 days after the date of the enactment of this Act. 

SEC. 106. AUTHORITY TO REDIRECT DELIVERY OF BENEFIT PAYMENTS WHEN A REPRESENTATIVE PAYEE FAILS TO PROVIDE REQUIRED ACCOUNTING. 

(a) TITLE II AMENDMENTS.—Section 205(j)(3) of the Social Security Act (42 U.S.C. 

405(j)(3)) (as amended by sections 102(a)(1)(B) and 105(a)(2)) is amended—

(1) by redesignating subparagraphs (E) and (F) as subparagraphs (F) and (G), 

respectively; and 

(2) by inserting after subparagraph (D) the following new subparagraph: 

‘‘(E) In any case in which the person described in subparagraph (A) or (D) receiving payments on behalf of another fails to submit a report required by the Commissioner of Social Security under subparagraph (A) or (D), the Commissioner may, 

after furnishing notice to such person and the individual entitled to such payment, 

require that such person appear in person at a field office of the Social Security Administration serving the area in which the individual resides in order to receive 

such payments.’’. 

(b) TITLE VIII AMENDMENTS.—Section 807(h) of such Act (42 U.S.C. 1007(h)) is 

amended—

(1) by redesignating paragraphs (3) and (4) as paragraphs (4) and (5), respectively; and 

(2) by inserting after paragraph (2) the following new paragraph: 

‘‘(3) AUTHORITY TO REDIRECT DELIVERY OF BENEFIT PAYMENTS WHEN A REPRESENTATIVE PAYEE FAILS TO PROVIDE REQUIRED ACCOUNTING.—In any case in 

which the person described in paragraph (1) or (2) receiving benefit payments 

on behalf of a qualified individual fails to submit a report required by the Commissioner of Social Security under paragraph (1) or (2), the Commissioner may, 

after furnishing notice to such person and the qualified individual, require that 

such person appear in person at a United States Government facility designated 

by the Social Security Administration as serving the area in which the qualified 

individual resides in order to receive such benefit payments.’’. 

(c) TITLE XVI AMENDMENT.—Section 1631(a)(2)(C) of such Act (42 U.S.C. 

1383(a)(2)(C)) is amended by adding at the end the following new clause: 

‘‘(v) In any case in which the person described in clause (i) or (iv) receiving payments on behalf of another fails to submit a report required by the Commissioner 

of Social Security under clause (i) or (iv), the Commissioner may, after furnishing 

notice to the person and the individual entitled to the payment, require that such 

person appear in person at a field office of the Social Security Administration serving the area in which the individual resides in order to receive such payments.’’. 

(d) EFFECTIVE DATE.—The amendment made by this section shall take effect 180 

days after the date of the enactment of this Act. 

Subtitle B—Enforcement 

SEC. 111. CIVIL MONETARY PENALTY AUTHORITY WITH RESPECT TO WRONGFUL CONVERSIONS BY REPRESENTATIVE PAYEES. 

(a) IN GENERAL.—Section 1129(a) of the Social Security Act (42 U.S.C. 1320a–8) 

is amended by adding at the end the following new paragraph: 

12

‘‘(3) Any person (including an organization, agency, or other entity) who, having 

received, while acting in the capacity of a representative payee pursuant to section 

205(j), 807, or 1631(a)(2), a payment under title II, VIII, or XVI for the use and benefit of another individual, converts such payment, or any part thereof, to a use that 

such person knows or should know is other than for the use and benefit of such 

other individual shall be subject to, in addition to any other penalties that may be 

prescribed by law, a civil money penalty of not more than $5,000 for each such conversion. Such person shall also be subject to an assessment, in lieu of damages sustained by the United States resulting from the conversion, of not more than twice 

the amount of any payments so converted.’’. (b) EFFECTIVE DATE.—The amendment made by this section shall apply with respect to violations committed after the date of the enactment of this Act. 

TITLE II—PROGRAM PROTECTIONS 

SEC. 201. CIVIL MONETARY PENALTY AUTHORITY WITH RESPECT TO KNOWING WITHHOLDING OF MATERIAL FACTS. 

(a) TREATMENT OF WITHHOLDING OF MATERIAL FACTS.— (1) CIVIL PENALTIES.—Section 1129(a)(1) of the Social Security Act (42 U.S.C. 

1320a–8(a)(1)) is amended— (A) by striking ‘‘who’’ in the first sentence and inserting ‘‘who—’’; 

(B) by striking ‘‘makes’’ in the first sentence and all that follows through ‘‘shall be subject to,’’ and inserting the following: ‘‘(A) makes, or causes to be made, a statement or representation of a material 

fact, for use in determining any initial or continuing right to or the amount of 

monthly insurance benefits under title II or benefits or payments under title 

VIII or XVI, that the person knows or should know is false or misleading, ‘‘(B) makes such a statement or representation for such use with knowing disregard for the truth, or ‘‘(C) omits from a statement or representation for such use, or otherwise withholds disclosure of, a fact which the person knows or should know is material 

to the determination of any initial or continuing right to or the amount of 

monthly insurance benefits under title II or benefits or payments under title 

VIII or XVI, if the person knows, or should know, that the statement or representation with such omission is false or misleading or that the withholding 

of such disclosure is misleading, 

shall be subject to,’’; 

(C) by inserting ‘‘or each receipt of such benefits or payments while withholding disclosure of such fact’’ after ‘‘each such statement or representation’’ in the first sentence; 

(D) by inserting ‘‘or because of such withholding of disclosure of a material fact’’ after ‘‘because of such statement or representation’’ in the second 

sentence; and 

(E) by inserting ‘‘or such a withholding of disclosure’’ after ‘‘such a statement or representation’’ in the second sentence. 

(2) ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES.—Section 1129A(a) 

of such Act (42 U.S.C. 1320a–8a(a)) is amended— (A) by striking ‘‘who’’ the first place it appears and inserting ‘‘who—’’; and 

(B) by striking ‘‘makes’’ and all that follows through ‘‘shall be subject to,’’ and inserting the following: ‘‘(1) makes, or causes to be made, a statement or representation of a material 

fact, for use in determining any initial or continuing right to or the amount of 

monthly insurance benefits under title II or benefits or payments under title 

XVI that the person knows or should know is false or misleading, 

‘‘(2) makes such a statement or representation for such use with knowing disregard for the truth, or 

‘‘(3) omits from a statement or representation for such use, or otherwise withholds disclosure of, a fact which the person knows or should know is material 

to the determination of any initial or continuing right to or the amount of 

monthly insurance benefits under title II or benefits or payments under title 

XVI, if the person knows, or should know, that the statement or representation 

with such omission is false or misleading or that the withholding of such disclosure is misleading, 

shall be subject to,’’. 

(b) CLARIFICATION OF TREATMENT OF RECOVERED AMOUNTS.—Section 1129(e)(2)(B) 

of such Act (42 U.S.C. 1320a–8(e)(2)(B)) is amended by striking ‘‘In the case of 

amounts recovered arising out of a determination relating to title VIII or XVI,’’ and 

inserting ‘‘In the case of any other amounts recovered under this section,’’. 

13

(c) CONFORMING AMENDMENTS.—

(1) Section 1129(b)(3)(A) of such Act (42 U.S.C. 1320a–8(b)(3)(A)) is amended 

by striking ‘‘charging fraud or false statements’’. 

(2) Section 1129(c)(1) of such Act (42 U.S.C. 1320a–8(c)(1)) is amended by 

striking ‘‘and representations’’ and inserting ‘‘, representations, or actions’’. 

(3) Section 1129(e)(1)(A) of such Act (42 U.S.C. 1320a–8(e)(1)(A)) is amended 

by striking ‘‘statement or representation referred to in subsection (a) was made’’

and inserting ‘‘violation occurred’’. 

(d) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to violations committed after the date on which the Commissioner implements 

the centralized computer file described in section 202. 

SEC. 202. ISSUANCE BY COMMISSIONER OF SOCIAL SECURITY OF RECEIPTS TO ACKNOWLEDGE SUBMISSION OF REPORTS OF CHANGES IN WORK OR EARNINGS STATUS OF 

DISABLED BENEFICIARIES. 

Effective as soon as possible, but not later than 1 year after the date of the enactment of this Act, until such time as the Commissioner of Social Security implements 

a centralized computer file recording the date of the submission of information by 

a disabled beneficiary (or representative) regarding a change in the beneficiary’s 

work or earnings status, the Commissioner shall issue a receipt to the disabled beneficiary (or representative) each time he or she submits documentation, or otherwise 

reports to the Commissioner, on a change in such status. 

SEC. 203. DENIAL OF TITLE II BENEFITS TO PERSONS FLEEING PROSECUTION, CUSTODY, OR 

CONFINEMENT, AND TO PERSONS VIOLATING PROBATION OR PAROLE. 

(a) IN GENERAL.—Section 202(x) of the Social Security Act (42 U.S.C. 402(x)) is 

amended—

(1) in the heading, by striking ‘‘Prisoners’’ and all that follows and inserting 

the following: ‘‘Prisoners, Certain Other Inmates of Publicly Funded Institutions, Fugitives, Probationers, and Parolees’’; 

(2) in paragraph (1)(A)(ii)(IV), by striking ‘‘or’’ at the end; 

(3) in paragraph (1)(A)(iii), by striking the period at the end and inserting a 

comma; 

(4) by inserting after paragraph (1)(A)(iii) the following: 

‘‘(iv) is fleeing to avoid prosecution, or custody or confinement after conviction, 

under the laws of the place from which the person flees, for a crime, or an attempt to commit a crime, which is a felony under the laws of the place from 

which the person flees, or which, in the case of the State of New Jersey, is a 

high misdemeanor under the laws of such State, or 

‘‘(v) is violating a condition of probation or parole imposed under Federal or 

State law. 

In the case of an individual from whom such monthly benefits have been withheld 

pursuant to clause (iv) or (v), the Commissioner may, for good cause shown, pay 

such withheld benefits to the individual.’’; and 

(5) in paragraph (3), by adding at the end the following new subparagraph: 

‘‘(C) Notwithstanding the provisions of section 552a of title 5, United States Code, 

or any other provision of Federal or State law (other than section 6103 of the Internal Revenue Code of 1986 and section 1106(c) of this Act), the Commissioner shall 

furnish any Federal, State, or local law enforcement officer, upon the written request of the officer, with the current address, Social Security number, and photograph (if applicable) of any beneficiary under this title, if the officer furnishes the 

Commissioner with the name of the beneficiary, and other identifying information 

as reasonably required by the Commissioner to establish the unique identity of the 

beneficiary, and notifies the Commissioner that—

‘‘(i) the beneficiary—

‘‘(I) is described in clause (iv) or (v) of paragraph (1)(A); and 

‘‘(II) has information that is necessary for the officer to conduct the officer’s official duties; and 

‘‘(ii) the location or apprehension of the beneficiary is within the officer’s official duties.’’. 

(b) REGULATIONS.—Not later than the first day of the first month that begins on 

or after the date that is 9 months after the date of the enactment of this Act, the 

Commissioner of Social Security shall promulgate regulations governing payment by 

the Commissioner, for good cause shown, of withheld benefits, pursuant to the last 

sentence of section 202(x)(1)(A) of the Social Security Act (as amended by subsection 

(a)). 

(c) EFFECTIVE DATE.—The amendments made by subsection (a) shall take effect 

on the first day of the first month that begins on or after the date that is 9 months 

after the date of the enactment of this Act. 

14

SEC. 204. REQUIREMENTS RELATING TO OFFERS TO PROVIDE FOR A FEE A PRODUCT OR 

SERVICE AVAILABLE WITHOUT CHARGE FROM THE SOCIAL SECURITY ADMINISTRATION. 

(a) IN GENERAL.—Section 1140 of the Social Security Act (42 U.S.C. 1320b–10) is 

amended—

(1) in subsection (a), by adding at the end the following new paragraph: 

‘‘(4)(A) No person shall offer, for a fee, to assist an individual to obtain a product 

or service that the person knows or should know is provided free of charge by the 

Social Security Administration unless, at the time the offer is made, the person provides to the individual to whom the offer is tendered a notice that—

‘‘(i) explains that the product or service is available free of charge from the 

Social Security Administration, and 

‘‘(ii) complies with standards prescribed by the Commissioner of Social Security respecting the content of such notice and its placement, visibility, and legibility. 

‘‘(B) Subparagraph (A) shall not apply to any offer—

‘‘(i) to serve as a claimant representative in connection with a claim arising 

under title II, title VIII, or title XVI; or 

‘‘(ii) to prepare, or assist in the preparation of, an individual’s plan for achieving self-support under title XVI.’’; and 

(2) in the heading, by striking ‘‘PROHIBITION OF MISUSE OF SYMBOLS, EMBLEMS, 

OR NAMES IN REFERENCE’’ and inserting ‘‘PROHIBITIONS RELATING TO REFERENCES’’. 

(b) EFFECTIVE DATE.—The amendments made by this section shall apply to offers 

of assistance made after the sixth month ending after the Commissioner of Social 

Security promulgates final regulations prescribing the standards applicable to the 

notice required to be provided in connection with such offer. The Commissioner shall 

promulgate such final regulations within 1 year after the date of the enactment of 

this Act. 

SEC. 205. REFUSAL TO RECOGNIZE CERTAIN INDIVIDUALS AS CLAIMANT REPRESENTATIVES. 

Section 206(a)(1) of the Social Security Act (42 U.S.C. 406(a)(1)) is amended by 

inserting after the second sentence the following: ‘‘Notwithstanding the preceding 

sentences, the Commissioner, after due notice and opportunity for hearing, (A) may 

refuse to recognize as a representative, and may disqualify a representative already 

recognized, any attorney who has been disbarred or suspended from any court or 

bar to which he or she was previously admitted to practice or who has been disqualified from participating in or appearing before any Federal program or agency, 

and (B) may refuse to recognize, and may disqualify, as a non-attorney representative any attorney who has been disbarred or suspended from any court or bar to 

which he or she was previously admitted to practice. A representative who has been 

disqualified or suspended pursuant to this section from appearing before the Social 

Security Administration as a result of collecting or receiving a fee in excess of the 

amount authorized shall be barred from appearing before the Social Security Administration as a representative until full restitution is made to the claimant and, 

thereafter, may be considered for reinstatement only under such rules as the Commissioner may prescribe.’’. 

SEC. 206. PENALTY FOR CORRUPT OR FORCIBLE INTERFERENCE WITH ADMINISTRATION OF 

SOCIAL SECURITY ACT. 

Part A of title XI of the Social Security Act (42 U.S.C. 1301 et seq.) is amended 

by inserting after section 1129A the following new section: 

‘‘ATTEMPTS TO INTERFERE WITH ADMINISTRATION OF SOCIAL SECURITY ACT

‘‘SEC. 1129B. Whoever corruptly or by force or threats of force (including any 

threatening letter or communication) attempts to intimidate or impede any officer, 

employee, or contractor of the Social Security Administration (including any State 

employee of a disability determination service or any other individual designated by 

the Commissioner of Social Security) acting in an official capacity to carry out a 

duty under this Act, or in any other way corruptly or by force or threats of force 

(including any threatening letter or communication) obstructs or impedes, or attempts to obstruct or impede, the due administration of this Act, shall be fined not 

more than $5,000, imprisoned not more than 3 years, or both, except that if the offense is committed only by threats of force, the person shall be fined not more than 

$3,000, imprisoned not more than 1 year, or both. In this subsection, the term 

‘threats of force’ means threats of harm to the officer or employee of the United 

States or to a contractor of the Social Security Administration, or to a member of 

the family of such an officer or employee or contractor.’’. 

15

SEC. 207. USE OF SYMBOLS, EMBLEMS, OR NAMES IN REFERENCE TO SOCIAL SECURITY OR 

MEDICARE. 

(a) IN GENERAL.—Section 1140(a)(1) of the Social Security Act (42 U.S.C. 1320b– 10(a)(1)) is amended— (1) in subparagraph (A), by inserting ‘‘ ‘Centers for Medicare & Medicaid 

Services’,’’ after ‘‘ ‘Health Care Financing Administration’,’’, by striking ‘‘or ‘Medicaid’, ’’ and inserting ‘‘ ‘Medicaid’, ‘Death Benefits Update’, ‘Federal Benefit 

Information’, ‘Funeral Expenses’, or ‘Final Supplemental Plan’,’’ and by inserting ‘‘ ‘CMS’,’’ after ‘‘ ‘HCFA’,’’; 

(2) in subparagraph (B), by inserting ‘‘Centers for Medicare & Medicaid Services,’’ after ‘‘Health Care Financing Administration,’’ each place it appears; and 

(3) in the matter following subparagraph (B), by striking ‘‘the Health Care Financing Administration,’’ each place it appears and inserting ‘‘the Centers for 

Medicare & Medicaid Services,’’. (b) EFFECTIVE DATE.—The amendments made by this section shall apply to items 

sent after 180 days after the date of the enactment of this Act. 

SEC. 208. DISQUALIFICATION FROM PAYMENT DURING TRIAL WORK PERIOD UPON CONVICTION OF FRAUDULENT CONCEALMENT OF WORK ACTIVITY. 

(a) IN GENERAL.—Section 222(c) of the Social Security Act (42 U.S.C. 422(c)) is 

amended by adding at the end the following new paragraph: ‘‘(5) Upon conviction by a Federal court that an individual has fraudulently concealed work activity during a period of trial work from the Commissioner of Social 

Security by—

‘‘(A) providing false information to the Commissioner of Social Security as to 

whether the individual had earnings in or for a particular period, or as to the 

amount thereof; 

‘‘(B) receiving disability insurance benefits under this title while engaging in 

work activity under another identity, including under another social security account number or a number purporting to be a social security account number; 

or 

‘‘(C) taking other actions to conceal work activity with an intent fraudulently 

to secure payment in a greater amount than is due or when no payment is authorized, 

no benefit shall be payable to such individual under this title with respect to a period of disability for any month before such conviction during which the individual 

rendered services during the period of trial work with respect to which the fraudulently concealed work activity occurred, and amounts otherwise due under this title 

as restitution, penalties, assessments, fines, or other repayments shall in all cases 

be in addition to any amounts for which such individual is liable as overpayments 

by reason of such concealment.’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with 

respect to work activity performed after the date of the enactment of this Act. 

SEC. 209. AUTHORITY FOR JUDICIAL ORDERS OF RESTITUTION. 

(a) AMENDMENTS TO TITLE II.—Section 208 of the Social Security Act (42 U.S.C. 

408) is amended—

(1) by redesignating subsections (b), (c), and (d) as subsections (c), (d), and 

(e), respectively; and 

(2) by inserting after subsection (a) the following new subsection: 

‘‘(b)(1) Any Federal court, when sentencing a defendant convicted of an offense 

under subsection (a), may order, in addition to or in lieu of any other penalty authorized by law, that the defendant make restitution to the Social Security Administration. 

‘‘(2) Sections 3612, 3663, and 3664 of title 18, United States Code, shall apply 

with respect to the issuance and enforcement of orders of restitution under this subsection. In so applying such sections, the Social Security Administration shall be 

considered the victim. 

‘‘(3) If the court does not order restitution, or orders only partial restitution, under 

this subsection, the court shall state on the record the reasons therefor.’’. 

(b) AMENDMENTS TO TITLE VIII.—Section 807(i) of such Act (42 U.S.C. 1007(i)) is 

amended—

(1) by striking ‘‘(i) RESTITUTION.—In any case where’’ and inserting the following: 

‘‘(i) RESTITUTION.—

‘‘(1) IN GENERAL.—In any case where’’; and 

(2) by adding at the end the following new paragraph: 

‘‘(2) COURT ORDER FOR RESTITUTION.—

‘‘(A) IN GENERAL.—Any Federal court, when sentencing a defendant convicted of an offense under subsection (a), may order, in addition to or in 

16

lieu of any other penalty authorized by law, that the defendant make restitution to the Social Security Administration. ‘‘(B) RELATED PROVISIONS.—Sections 3612, 3663, and 3664 of title 18, 

United States Code, shall apply with respect to the issuance and enforcement of orders of restitution under this paragraph. In so applying such sections, the Social Security Administration shall be considered the victim. ‘‘(C) STATED REASONS FOR NOT ORDERING RESTITUTION.—If the court does 

not order restitution, or orders only partial restitution, under this paragraph, the court shall state on the record the reasons therefor.’’. (c) AMENDMENTS TO TITLE XVI.—Section 1632 of such Act (42 U.S.C. 1383a) is 

amended— (1) by redesignating subsection (b) as subsection (c); and 

(2) by inserting after subsection (a) the following new subsection: ‘‘(b)(1) Any Federal court, when sentencing a defendant convicted of an offense 

under subsection (a), may order, in addition to or in lieu of any other penalty authorized by law, that the defendant make restitution to the Social Security Administration. ‘‘(2) Sections 3612, 3663, and 3664 of title 18, United States Code, shall apply 

with respect to the issuance and enforcement of orders of restitution under this subsection. In so applying such sections, the Social Security Administration shall be 

considered the victim. 

‘‘(3) If the court does not order restitution, or orders only partial restitution, under 

this subsection, the court shall state on the record the reasons therefor.’’. 

(d) SPECIAL ACCOUNT FOR RECEIPT OF RESTITUTION PAYMENTS.—Section 704(b) of 

such Act (42 U.S.C. 904(b)) is amended by adding at the end the following new paragraph: 

‘‘(3)(A) Except as provided in subparagraph (B), amounts received by the Social 

Security Administration pursuant to an order of restitution under section 208(b), 

807(i), or 1632(b) shall be credited to a special fund established in the Treasury of 

the United States for amounts so received or recovered. The amounts so credited, 

to the extent and in the amounts provided in advance in appropriations Acts, shall 

be available to defray expenses incurred in carrying out titles II, VIII, and XVI. 

‘‘(B) Subparagraph (A) shall not apply with respect to amounts received in connection with misuse by a representative payee (within the meaning of sections 205(j), 

807, and 1631(a)(2)) of funds paid as benefits under title II, VIII, or XVI. Such 

amounts received in connection with misuse of funds paid as benefits under title II 

shall be transferred to the Managing Trustee of the Federal Old-Age and Survivors 

Insurance Trust Fund or the Federal Disability Insurance Trust Fund, as determined appropriate by the Commissioner of Social Security, and such amounts shall 

be deposited by the Managing Trustee into such Trust Fund. All other such 

amounts shall be deposited by the Commissioner into the general fund of the Treasury as miscellaneous receipts.’’. 

(e) EFFECTIVE DATE.—The amendments made by subsections (a), (b), and (c) shall 

apply with respect to violations occurring on or after the date of the enactment of 

this Act. 

TITLE III—ATTORNEY FEE PAYMENT SYSTEM 

IMPROVEMENTS 

SEC. 301. CAP ON ATTORNEY ASSESSMENTS. 

(a) IN GENERAL.—Section 206(d)(2)(A) of the Social Security Act (42 U.S.C. 

406(d)(2)(A)) is amended—

(1) by inserting ‘‘, except that the maximum amount of the assessment may 

not exceed the greater of $75 or the adjusted amount as provided pursuant to 

the following two sentences’’ after ‘‘subparagraph (B)’’; and 

(2) by adding at the end the following new sentence: ‘‘In the case of any calendar year beginning after the amendments made by section 301 of the Social 

Security Protection Act of 2003 take effect, the dollar amount specified in the 

preceding sentence (including a previously adjusted amount) shall be adjusted 

annually under the procedures used to adjust benefit amounts under section 

215(i)(2)(A)(ii), except such adjustment shall be based on the higher of $75 or 

the previously adjusted amount that would have been in effect for December of 

the preceding year, but for the rounding of such amount pursuant to the following sentence. Any amount so adjusted that is not a multiple of $1 shall be 

rounded to the next lowest multiple of $1, but in no case less than $75.’’. 

(b) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to fees for representation of claimants which are first required to be certified 

17

or paid under section 206 of the Social Security Act on or after the first day of the 

first month that begins after 180 days after the date of the enactment of this Act. 

SEC. 302. EXTENSION OF ATTORNEY FEE PAYMENT SYSTEM TO TITLE XVI CLAIMS. 

(a) IN GENERAL.—Section 1631(d)(2) of the Social Security Act (42 U.S.C. 

1383(d)(2)) is amended—

(1) in subparagraph (A), in the matter preceding clause (i)—

(A) by striking ‘‘section 206(a)’’ and inserting ‘‘section 206’’; 

(B) by striking ‘‘(other than paragraph (4) thereof)’’ and inserting ‘‘(other 

than subsections (a)(4) and (d) thereof)’’; and 

(C) by striking ‘‘paragraph (2) thereof’’ and inserting ‘‘such section’’; 

(2) in subparagraph (A)(i), by striking ‘‘in subparagraphs (A)(ii)(I) and (C)(i),’’

and inserting ‘‘in subparagraphs (A)(ii)(I) and (D)(i) of subsection (a)(2)’’, and by 

striking ‘‘and’’ at the end; 

(3) by striking subparagraph (A)(ii) and inserting the following: 

‘‘(ii) by substituting, in subsections (a)(2)(B) and (b)(1)(B)(i), the phrase ‘section 1631(a)(7)(A) or the requirements of due process of law’ for the phrase ‘subsection (g) or (h) of section 223’; 

‘‘(iii) by substituting, in subsection (a)(2)(C)(i), the phrase ‘under title II’ for 

the phrase ‘under title XVI’; 

‘‘(iv) by substituting, in subsection (b)(1)(A), the phrase ‘pay the amount of 

such fee’ for the phrase ‘certify the amount of such fee for payment’ and by 

striking, in subsection (b)(1)(A), the phrase ‘or certified for payment’; and 

‘‘(v) by substituting, in subsection (b)(1)(B)(ii), the phrase ‘deemed to be such 

amounts as determined before any applicable reduction under section 1631(g), 

and reduced by the amount of any reduction in benefits under this title or title 

II made pursuant to section 1127(a)’ for the phrase ‘determined before any applicable reduction under section 1127(a))’.’’; and 

(4) by striking subparagraph (B) and inserting the following new subparagraphs: 

‘‘(B) Subject to subparagraph (C), if the claimant is determined to be entitled to 

past-due benefits under this title and the person representing the claimant is an 

attorney, the Commissioner of Social Security shall pay out of such past-due benefits to such attorney an amount equal to the lesser of—

‘‘(i) so much of the maximum fee as does not exceed 25 percent of such pastdue benefits (as determined before any applicable reduction under section 

1631(g) and reduced by the amount of any reduction in benefits under this title 

or title II pursuant to section 1127(a)), or 

‘‘(ii) the amount of past-due benefits available after any applicable reductions 

under sections 1631(g) and 1127(a). 

‘‘(C)(i) Whenever a fee for services is required to be paid to an attorney from a 

claimant’s past-due benefits pursuant to subparagraph (B), the Commissioner shall 

impose on the attorney an assessment calculated in accordance with clause (ii). 

‘‘(ii)(I) The amount of an assessment under clause (i) shall be equal to the product 

obtained by multiplying the amount of the representative’s fee that would be required to be paid by subparagraph (B) before the application of this subparagraph, 

by the percentage specified in subclause (II), except that the maximum amount of 

the assessment may not exceed $75. In the case of any calendar year beginning 

after the amendments made by section 302 of the Social Security Protection Act of 

2003 take effect, the dollar amount specified in the preceding sentence (including 

a previously adjusted amount) shall be adjusted annually under the procedures used 

to adjust benefit amounts under section 215(i)(2)(A)(ii), except such adjustment shall 

be based on the higher of $75 or the previously adjusted amount that would have 

been in effect for December of the preceding year, but for the rounding of such 

amount pursuant to the following sentence. Any amount so adjusted that is not a 

multiple of $1 shall be rounded to the next lowest multiple of $1, but in no case 

less than $75. 

‘‘(II) The percentage specified in this subclause is such percentage rate as the 

Commissioner determines is necessary in order to achieve full recovery of the costs 

of determining and approving fees to attorneys from the past-due benefits of claimants, but not in excess of 6.3 percent. 

‘‘(iii) The Commissioner may collect the assessment imposed on an attorney under 

clause (i) by offset from the amount of the fee otherwise required by subparagraph 

(B) to be paid to the attorney from a claimant’s past-due benefits. 

‘‘(iv) An attorney subject to an assessment under clause (i) may not, directly or 

indirectly, request or otherwise obtain reimbursement for such assessment from the 

claimant whose claim gave rise to the assessment. 

‘‘(v) Assessments on attorneys collected under this subparagraph shall be deposited in the Treasury in a separate fund created for this purpose. 

18

‘‘(vi) The assessments authorized under this subparagraph shall be collected and 

available for obligation only to the extent and in the amount provided in advance 

in appropriations Acts. Amounts so appropriated are authorized to remain available 

until expended, for administrative expenses in carrying out this title and related 

laws.’’. 

(b) EFFECTIVE DATE.—

(1) IN GENERAL.—The amendments made by this section shall apply with respect to fees for representation of claimants which are first required to be certified or paid under section 1631(d)(2) of the Social Security Act on or after the 

first day of the first month that begins after 270 days after the date of the enactment of this Act. 

(2) SUNSET.—Such amendments shall not apply with respect to fees for representation of claimants in the case of any claim for benefits with respect to 

which the agreement for representation is entered into after 5 years after the 

date on which the Commissioner of Social Security first implements the amendments made by this section. 

(c) STUDY REGARDING FEE-WITHHOLDING FOR NON-ATTORNEY REPRESENTATIVES.—

(1) STUDY.—As soon as practicable after the date of the enactment of this Act, 

the Comptroller General of the United States shall undertake a study regarding 

fee-withholding for non-attorney representatives representing claimants before 

the Social Security Administration. 

(2) MATTERS TO BE STUDIED.—In conducting the study under this subsection, 

the Comptroller General shall—

(A) compare the non-attorney representatives who seek fee approval for 

representing claimants before the Social Security Administration to attorney representatives who seek such fee approval, with regard to—

(i) their training, qualifications, and competency, 

(ii) the type and quality of services provided, and 

(iii) the extent to which claimants are protected through oversight of 

such representatives by the Social Security Administration or other organizations, and 

(B) consider the potential results of extending to non-attorney representatives the fee withholding procedures that apply under titles II and XVI of 

the Social Security Act for the payment of attorney fees, including the effect 

on claimants and program administration. 

(3) REPORT.—Not later than 1 year after the date of the enactment of this Act, 

the Comptroller General shall submit to the Committee on Ways and Means of 

the House of Representatives and the Committee on Finance of the Senate a 

report detailing the results of the Comptroller General’s study conducted pursuant to this subsection. 

TITLE IV—MISCELLANEOUS AND TECHNICAL 

AMENDMENTS 

Subtitle A—Amendments Relating to the Ticket to 

Work and Work Incentives Improvement Act of 

1999

SEC. 401. APPLICATION OF DEMONSTRATION AUTHORITY SUNSET DATE TO NEW PROJECTS. 

Section 234 of the Social Security Act (42 U.S.C. 434) is amended—

(1) in the first sentence of subsection (c), by striking ‘‘conducted under subsection (a)’’ and inserting ‘‘initiated under subsection (a) on or before December 

17, 2004’’; and 

(2) in subsection (d)(2), by amending the first sentence to read as follows: 

‘‘The authority to initiate projects under the preceding provisions of this section 

shall terminate on December 18, 2004.’’. 

SEC. 402. EXPANSION OF WAIVER AUTHORITY AVAILABLE IN CONNECTION WITH DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN DISABILITY INSURANCE 

BENEFITS BASED ON EARNINGS. 

Section 302(c) of the Ticket to Work and Work Incentives Improvement Act of 

1999 (42 U.S.C. 434 note) is amended by striking ‘‘(42 U.S.C. 401 et seq.),’’ and inserting ‘‘(42 U.S.C. 401 et seq.) and the requirements of section 1148 of such Act 

(42 U.S.C. 1320b–19) as they relate to the program established under title II of such 

Act,’’. 

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SEC. 403. FUNDING OF DEMONSTRATION PROJECTS PROVIDED FOR REDUCTIONS IN DISABILITY INSURANCE BENEFITS BASED ON EARNINGS. 

Section 302(f) of the Ticket to Work and Work Incentives Improvement Act of 

1999 (42 U.S.C. 434 note) is amended to read as follows: 

‘‘(f) EXPENDITURES.—Administrative expenses for demonstration projects under 

this section shall be paid from funds available for the administration of title II or 

XVIII of the Social Security Act, as appropriate. Benefits payable to or on behalf 

of individuals by reason of participation in projects under this section shall be made 

from the Federal Disability Insurance Trust Fund and the Federal Old-Age and Survivors Insurance Trust Fund, as determined appropriate by the Commissioner of Social Security, and from the Federal Hospital Insurance Trust Fund and the Federal 

Supplementary Medical Insurance Trust Fund, as determined appropriate by the 

Secretary of Health and Human Services, from funds available for benefits under 

such title II or XVIII.’’. 

SEC. 404. AVAILABILITY OF FEDERAL AND STATE WORK INCENTIVE SERVICES TO ADDITIONAL INDIVIDUALS. 

(a) FEDERAL WORK INCENTIVES OUTREACH PROGRAM.—

(1) IN GENERAL.—Section 1149(c)(2) of the Social Security Act (42 U.S.C. 

1320b–20(c)(2)) is amended to read as follows: 

‘‘(2) DISABLED BENEFICIARY.—The term ‘disabled beneficiary’ means an individual—

‘‘(A) who is a disabled beneficiary as defined in section 1148(k)(2) of this 

Act; 

‘‘(B) who is receiving a cash payment described in section 1616(a) of this 

Act or a supplementary payment described in section 212(a)(3) of Public 

Law 93–66 (without regard to whether such payment is paid by the Commissioner pursuant to an agreement under section 1616(a) of this Act or 

under section 212(b) of Public Law 93–66); 

‘‘(C) who, pursuant to section 1619(b) of this Act, is considered to be receiving benefits under title XVI of this Act; or 

‘‘(D) who is entitled to benefits under part A of title XVIII of this Act by 

reason of the penultimate sentence of section 226(b) of this Act.’’. 

(2) EFFECTIVE DATE.—The amendment made by this subsection shall apply 

with respect to grants, cooperative agreements, or contracts entered into on or 

after the date of the enactment of this Act. 

(b) STATE GRANTS FOR WORK INCENTIVES ASSISTANCE.—

(1) DEFINITION OF DISABLED BENEFICIARY.—Section 1150(g)(2) of such Act (42 

U.S.C. 1320b–21(g)(2)) is amended to read as follows: 

‘‘(2) DISABLED BENEFICIARY.—The term ‘disabled beneficiary’ means an individual—

‘‘(A) who is a disabled beneficiary as defined in section 1148(k)(2) of this 

Act; 

‘‘(B) who is receiving a cash payment described in section 1616(a) of this 

Act or a supplementary payment described in section 212(a)(3) of Public 

Law 93–66 (without regard to whether such payment is paid by the Commissioner pursuant to an agreement under section 1616(a) of this Act or 

under section 212(b) of Public Law 93–66); 

‘‘(C) who, pursuant to section 1619(b) of this Act, is considered to be receiving benefits under title XVI of this Act; or 

‘‘(D) who is entitled to benefits under part A of title XVIII of this Act by 

reason of the penultimate sentence of section 226(b) of this Act.’’. 

(2) ADVOCACY OR OTHER SERVICES NEEDED TO MAINTAIN GAINFUL EMPLOYMENT.—Section 1150(b)(2) of such Act (42 U.S.C. 1320b–21(b)(2)) is amended by 

striking ‘‘secure or regain’’ and inserting ‘‘secure, maintain, or regain’’. 

(3) EFFECTIVE DATE.—The amendments made by this subsection shall apply 

with respect to payments provided after the date of the enactment of this Act. 

SEC. 405. TECHNICAL AMENDMENT CLARIFYING TREATMENT FOR CERTAIN PURPOSES OF INDIVIDUAL WORK PLANS UNDER THE TICKET TO WORK AND SELF-SUFFICIENCY 

PROGRAM. 

(a) IN GENERAL.—Section 1148(g)(1) of the Social Security Act (42 U.S.C. 1320b–

19) is amended by adding at the end, after and below subparagraph (E), the following new sentence: 

‘‘An individual work plan established pursuant to this subsection shall be treated, for purposes of section 51(d)(6)(B)(i) of the Internal Revenue Code of 1986, 

as an individualized written plan for employment under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 1973.’’. 

20

(b) EFFECTIVE DATE.—The amendment made by subsection (a) shall take effect as 

if included in section 505 of the Ticket to Work and Work Incentives Improvement 

Act of 1999 (Public Law 106–170; 113 Stat. 1921). 

Subtitle B—Miscellaneous Amendments 

SEC. 411. ELIMINATION OF TRANSCRIPT REQUIREMENT IN REMAND CASES FULLY FAVORABLE TO THE CLAIMANT. 

(a) IN GENERAL.—Section 205(g) of the Social Security Act (42 U.S.C. 405(g)) is 

amended in the sixth sentence by striking ‘‘and a transcript’’ and inserting ‘‘and, in 

any case in which the Commissioner has not made a decision fully favorable to the 

individual, a transcript’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall apply with respect to final determinations issued (upon remand) on or after the date of the enactment of this Act. 

SEC. 412. NONPAYMENT OF BENEFITS UPON REMOVAL FROM THE UNITED STATES. 

(a) IN GENERAL.—Paragraphs (1) and (2) of section 202(n) of the Social Security 

Act (42 U.S.C. 402(n)(1), (2)) are each amended by striking ‘‘or (1)(E)’’. 

(b) EFFECTIVE DATE.—The amendment made by this section to section 202(n)(1) 

of the Social Security Act shall apply to individuals with respect to whom the Commissioner of Social Security receives a removal notice from the Attorney General 

after the date of the enactment of this Act. The amendment made by this section 

to section 202(n)(2) of the Social Security Act shall apply with respect to removals 

occurring after the date of the enactment of this Act. 

SEC. 413. REINSTATEMENT OF CERTAIN REPORTING REQUIREMENTS. 

Section 3003(a)(1) of the Federal Reports Elimination and Sunset Act of 1995 (31 

U.S.C. 1113 note) shall not apply to any report required to be submitted under any 

of the following provisions of law: 

(1)(A) Section 201(c)(2) of the Social Security Act (42 U.S.C. 401(c)(2)). 

(B) Section 1817(b)(2) of the Social Security Act (42 U.S.C. 1395i(b)(2)). 

(C) Section 1841(b)(2) of the Social Security Act (42 U.S.C. 1395t(b)(2)). 

(2)(A) Section 221(c)(3)(C) of the Social Security Act (42 U.S.C. 421(c)(3)(C)). 

(B) Section 221(i)(3) of the Social Security Act (42 U.S.C. 421(i)(3)). 

SEC. 414. CLARIFICATION OF DEFINITIONS REGARDING CERTAIN SURVIVOR BENEFITS. 

(a) WIDOWS.—Section 216(c) of the Social Security Act (42 U.S.C. 416(c)) is 

amended—

(1) by redesignating subclauses (A) through (C) of clause (6) as subclauses (i) 

through (iii), respectively; 

(2) by redesignating clauses (1) through (6) as clauses (A) through (F), respectively; 

(3) in clause (E) (as redesignated), by inserting ‘‘except as provided in paragraph (2),’’ before ‘‘she was married’’; 

(4) by inserting ‘‘(1)’’ after ‘‘(c)’’; and 

(5) by adding at the end the following new paragraph: 

‘‘(2) The requirements of paragraph (1)(E) in connection with the surviving wife 

of an individual shall be treated as satisfied if—

‘‘(A) the individual had been married prior to the individual’s marriage to the 

surviving wife, 

‘‘(B) the prior wife was institutionalized during the individual’s marriage to 

the prior wife due to mental incompetence or similar incapacity, 

‘‘(C) during the period of the prior wife’s institutionalization, the individual 

would have divorced the prior wife and married the surviving wife, but the individual did not do so because such divorce would have been unlawful, by reason 

of the prior wife’s institutionalization, under the laws of the State in which the 

individual was domiciled at the time (as determined based on evidence satisfactory to the Commissioner of Social Security), 

‘‘(D) the prior wife continued to remain institutionalized up to the time of her 

death, and 

‘‘(E) the individual married the surviving wife within 60 days after the prior 

wife’s death.’’. 

(b) WIDOWERS.—Section 216(g) of such Act (42 U.S.C. 416(g)) is amended—

(1) by redesignating subclauses (A) through (C) of clause (6) as subclauses (i) 

through (iii), respectively; 

(2) by redesignating clauses (1) through (6) as clauses (A) through (F), respectively; 

21

(3) in clause (E) (as redesignated), by inserting ‘‘except as provided in paragraph (2),’’ before ‘‘he was married’’; 

(4) by inserting ‘‘(1)’’ after ‘‘(g)’’; and 

(5) by adding at the end the following new paragraph: 

‘‘(2) The requirements of paragraph (1)(E) in connection with the surviving husband of an individual shall be treated as satisfied if—

‘‘(A) the individual had been married prior to the individual’s marriage to the 

surviving husband, 

‘‘(B) the prior husband was institutionalized during the individual’s marriage 

to the prior husband due to mental incompetence or similar incapacity, 

‘‘(C) during the period of the prior husband’s institutionalization, the individual would have divorced the prior husband and married the surviving husband, but the individual did not do so because such divorce would have been 

unlawful, by reason of the prior husband’s institutionalization, under the laws 

of the State in which the individual was domiciled at the time (as determined 

based on evidence satisfactory to the Commissioner of Social Security), 

‘‘(D) the prior husband continued to remain institutionalized up to the time 

of his death, and 

‘‘(E) the individual married the surviving husband within 60 days after the 

prior husband’s death.’’. 

(c) CONFORMING AMENDMENT.—Section 216(k) of such Act (42 U.S.C. 416(k)) is 

amended by striking ‘‘clause (5) of subsection (c) or clause (5) of subsection (g)’’ and 

inserting ‘‘clause (E) of subsection (c)(1) or clause (E) of subsection (g)(1)’’. 

(d) EFFECTIVE DATE.—The amendments made by this section shall be effective 

with respect to applications for benefits under title II of the Social Security Act filed 

during months ending after the date of the enactment of this Act. 

SEC. 415. CLARIFICATION RESPECTING THE FICA AND SECA TAX EXEMPTIONS FOR AN INDIVIDUAL WHOSE EARNINGS ARE SUBJECT TO THE LAWS OF A TOTALIZATION 

AGREEMENT PARTNER. 

Sections 1401(c), 3101(c), and 3111(c) of the Internal Revenue Code of 1986 are 

each amended by striking ‘‘to taxes or contributions for similar purposes under’’ and 

inserting ‘‘exclusively to the laws applicable to’’. 

SEC. 416. COVERAGE UNDER DIVIDED RETIREMENT SYSTEM FOR PUBLIC EMPLOYEES IN 

KENTUCKY. 

(a) IN GENERAL.—Section 218(d)(6)(C) of the Social Security Act (42 U.S.C. 

418(d)(6)(C)) is amended by inserting ‘‘Kentucky,’’ after ‘‘Illinois,’’. 

(b) EFFECTIVE DATE.—The amendment made by subsection (a) takes effect on January 1, 2003. 

SEC. 417. COMPENSATION FOR THE SOCIAL SECURITY ADVISORY BOARD. 

(a) IN GENERAL.—Subsection (f) of section 703 of the Social Security Act (42 

U.S.C. 903(f)) is amended to read as follows: 

‘‘Compensation, Expenses, and Per Diem 

‘‘(f) A member of the Board shall, for each day (including traveltime) during which 

the member is attending meetings or conferences of the Board or otherwise engaged 

in the business of the Board, be compensated at the daily rate of basic pay for level 

IV of the Executive Schedule. While serving on business of the Board away from 

their homes or regular places of business, members may be allowed travel expenses, 

including per diem in lieu of subsistence, as authorized by section 5703 of title 5, 

United States Code, for persons in the Government employed intermittently.’’. 

(b) EFFECTIVE DATE.—The amendment made by this section shall be effective as 

of January 1, 2003. 

SEC. 418. 60-MONTH PERIOD OF EMPLOYMENT REQUIREMENT FOR APPLICATION OF GOVERNMENT PENSION OFFSET EXEMPTION. 

(a) WIFE’S INSURANCE BENEFITS.—Section 202(b)(4)(A) of the Social Security Act 

(42 U.S.C. 402(b)(4)(A)) is amended by striking ‘‘if, on’’ and inserting ‘‘if, during any 

portion of the last 60 months of such service ending with’’. 

(b) HUSBAND’S INSURANCE BENEFITS.—Section 202(c)(2)(A) of such Act (42 U.S.C. 

402(c)(2)(A)) is amended by striking ‘‘if, on’’ and inserting ‘‘if, during any portion of 

the last 60 months of such service ending with’’. 

(c) WIDOW’S INSURANCE BENEFITS.—Section 202(e)(7)(A) of such Act (42 U.S.C. 

402(e)(7)(A)) is amended by striking ‘‘if, on’’ and inserting ‘‘if, during any portion of 

the last 60 months of such service ending with’’. 

(d) WIDOWER’S INSURANCE BENEFITS.—Section 202(f)(2)(A) of such Act (42 U.S.C. 

402(f)(2)(A)) is amended by striking ‘‘if, on’’ and inserting ‘‘if, during any portion of 

the last 60 months of such service ending with’’. 

22

(e) MOTHER’S AND FATHER’S INSURANCE BENEFITS.—Section 202(g)(4)(A) of the 

such Act (42 U.S.C. 402(g)(4)(A)) is amended by striking ‘‘if, on’’ and inserting ‘‘‘if, 

during any portion of the last 60 months of such service ending with’’. 

(f) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to applications for benefits under title II of the Social Security Act filed on 

or after the first day of the first month that begins after the date of the enactment 

of this Act, except that such amendments shall not apply in connection with monthly periodic benefits of any individual based on earnings while in service described 

in section 202(b)(4)(A), 202(c)(2)(A), 202(e)(7)(A), or 202(f)(2)(A) of the Social Security Act (in the matter preceding clause (i) thereof)—

(1) if the last day of such service occurs before the end of the 90-day period 

following the date of the enactment of this Act, or 

(2) in any case in which the last day of such service occurs after the end of 

such 90-day period, such individual performed such service during such 90-day 

period which constituted ‘‘employment’’ as defined in section 210 of such Act, 

and all such service subsequently performed by such individual has constituted 

such ‘‘employment’’. 

Subtitle C—Technical Amendments 

SEC. 421. TECHNICAL CORRECTION RELATING TO RESPONSIBLE AGENCY HEAD. 

Section 1143 of the Social Security Act (42 U.S.C. 1320b–13) is amended—

(1) by striking ‘‘Secretary’’ the first place it appears and inserting ‘‘Commissioner of Social Security’’; and 

(2) by striking ‘‘Secretary’’ each subsequent place it appears and inserting 

‘‘Commissioner’’. 

SEC. 422. TECHNICAL CORRECTION RELATING TO RETIREMENT BENEFITS OF MINISTERS. 

(a) IN GENERAL.—Section 211(a)(7) of the Social Security Act (42 U.S.C. 411(a)(7)) 

is amended by inserting ‘‘, but shall not include in any such net earnings from selfemployment the rental value of any parsonage or any parsonage allowance (whether 

or not excluded under section 107 of the Internal Revenue Code of 1986) provided 

after the individual retires, or any other retirement benefit received by such individual from a church plan (as defined in section 414(e) of such Code) after the individual retires’’ before the semicolon. 

(b) EFFECTIVE DATE.—The amendment made by this section shall apply to years 

beginning before, on, or after December 31, 1994. 

SEC. 423. TECHNICAL CORRECTIONS RELATING TO DOMESTIC EMPLOYMENT. 

(a) AMENDMENT TO INTERNAL REVENUE CODE.—Section 3121(a)(7)(B) of the Internal Revenue Code of 1986 is amended by striking ‘‘described in subsection (g)(5)’’

and inserting ‘‘on a farm operated for profit’’. 

(b) AMENDMENT TO SOCIAL SECURITY ACT.—Section 209(a)(6)(B) of the Social Security Act (42 U.S.C. 409(a)(6)(B)) is amended by striking ‘‘described in section 

210(f)(5)’’ and inserting ‘‘on a farm operated for profit’’. 

(c) CONFORMING AMENDMENT.—Section 3121(g)(5) of such Code and section 

210(f)(5) of such Act (42 U.S.C. 410(f)(5)) are amended by striking ‘‘or is domestic 

service in a private home of the employer’’. 

SEC. 424. TECHNICAL CORRECTIONS OF OUTDATED REFERENCES. 

(a) CORRECTION OF TERMINOLOGY AND CITATIONS RESPECTING REMOVAL FROM THE

UNITED STATES.—Section 202(n) of the Social Security Act (42 U.S.C. 402(n)) (as 

amended by section 412) is amended further—

(1) by striking ‘‘deportation’’ each place it appears and inserting ‘‘removal’’; 

(2) by striking ‘‘deported’’ each place it appears and inserting ‘‘removed’’; 

(3) in paragraph (1) (in the matter preceding subparagraph (A)), by striking 

‘‘under section 241(a) (other than under paragraph (1)(C) thereof)’’ and inserting 

‘‘under section 237(a) (other than paragraph (1)(C) thereof) or 212(a)(6)(A)’’; 

(4) in paragraph (2), by striking ‘‘under any of the paragraphs of section 

241(a) of the Immigration and Nationality Act (other than under paragraph 

(1)(C) thereof)’’ and inserting ‘‘under any of the paragraphs of section 237(a) of 

the Immigration and Nationality Act (other than paragraph (1)(C) thereof) or 

under section 212(a)(6)(A) of such Act’’; 

(5) in paragraph (3)—

(A) by striking ‘‘paragraph (19) of section 241(a)’’ and inserting ‘‘subparagraph (D) of section 237(a)(4)’’; and 

(B) by striking ‘‘paragraph (19)’’ and inserting ‘‘subparagraph (D)’’; and 

(6) in the heading, by striking ‘‘Deportation’’ and inserting ‘‘Removal’’. 

23

(b) CORRECTION OF CITATION RESPECTING THE TAX DEDUCTION RELATING TO

HEALTH INSURANCE COSTS OF SELF-EMPLOYED INDIVIDUALS.—Section 211(a)(15) of 

such Act (42 U.S.C. 411(a)(15)) is amended by striking ‘‘section 162(m)’’ and inserting ‘‘section 162(l)’’. 

(c) ELIMINATION OF REFERENCE TO OBSOLETE 20-DAY AGRICULTURAL WORK

TEST.—Section 3102(a) of the Internal Revenue Code of 1986 is amended by striking 

‘‘and the employee has not performed agricultural labor for the employer on 20 days 

or more in the calendar year for cash remuneration computed on a time basis’’. 

SEC. 425. TECHNICAL CORRECTION RESPECTING SELF-EMPLOYMENT INCOME IN COMMUNITY PROPERTY STATES. 

(a) SOCIAL SECURITY ACT AMENDMENT.—Section 211(a)(5)(A) of the Social Security 

Act (42 U.S.C. 411(a)(5)(A)) is amended by striking ‘‘all of the gross income’’ and all 

that follows and inserting ‘‘the gross income and deductions attributable to such 

trade or business shall be treated as the gross income and deductions of the spouse 

carrying on such trade or business or, if such trade or business is jointly operated, 

treated as the gross income and deductions of each spouse on the basis of their respective distributive share of the gross income and deductions;’’. 

(b) INTERNAL REVENUE CODE OF 1986 AMENDMENT.—Section 1402(a)(5)(A) of the 

Internal Revenue Code of 1986 is amended by striking ‘‘all of the gross income’’ and 

all that follows and inserting ‘‘the gross income and deductions attributable to such 

trade or business shall be treated as the gross income and deductions of the spouse 

carrying on such trade or business or, if such trade or business is jointly operated, 

treated as the gross income and deductions of each spouse on the basis of their respective distributive share of the gross income and deductions; and’’.

I. SUMMARY AND BACKGROUND

A. PURPOSE AND SUMMARY

The ‘‘Social Security Protection Act of 2003,’’ H.R. 743, as amended provides the Social Security Administration (SSA) with the enhanced tools it needs to fight waste, fraud and abuse in Social Security programs. 

Protects those unable to manage their financial affairs. The bill 

protects beneficiaries from representative payees who misuse benefits and enhances oversight of representative payees appointed by 

the SSA to manage Social Security and Supplemental Security Income (SSI) benefits for individuals who are unable to manage their 

own financial affairs. Representative payees would be held accountable for their actions when they misuse benefits entrusted to their 

care. 

Deters fraud. The legislation helps stop waste, fraud and abuse 

within the Social Security programs by denying benefits to fugitive 

felons and persons violating their probation or parole, creating new 

penalties to prevent persons from misrepresenting themselves 

when they offer Social Security-related services, prohibiting individuals who fraudulently conceal work activity from being eligible 

for a trial work period, allowing Federal courts to order individuals 

who break Social Security law to make restitution to the Social Security Trust Funds or general fund, and protecting Social Security 

employees from harm while conducting their duties. 

Helps individuals with disabilities. The bill improves access to 

legal representation for individuals with disabilities applying for 

benefits who need help negotiating the complex disability application process, enhances provisions of the Ticket to Work program to 

better enable SSA to test ways of helping individuals with disabilities return to work, and provides more individuals access to support and services to help them work. It also encourages more employers to hire individuals with disabilities by expanding eligibility 

for the Work Opportunity Tax Credit. 

24

Finally, the legislation corrects, clarifies, or modifies various 

technical aspects of the law. 

B. BACKGROUND AND NEED FOR THE LEGISLATION

The Social Security and SSI programs touch the lives of nearly 

every American and represent close to one-fourth of all Federal 

outlays in 2003. Nearly $500 billion in Social Security and SSI benefits were paid last year to about 50 million retired and disabled 

workers and their families and survivors, as well as disabled or 

aged low-income individuals. Given the programs’ magnitude and 

extensive influence over the economic well-being of American workers and their families, it is important to address inadequate protections for beneficiaries and to fight activities that drain resources 

from Social Security and undermine the financial security of beneficiaries. 

Nearly 8 million Social Security and SSI beneficiaries cannot, for 

physical or mental reasons, manage their own financial affairs. In 

these cases, the SSA appoints an individual or organization, called 

a ‘‘representative payee,’’ to manage these individuals’ benefits. 

While most representative payees are conscientious and honest, 

some violate the trust placed in them. In a report issued in June 

2002, Analysis of Information Concerning Representative Payee 

Misuse of Beneficiaries’ Payments, the SSA Inspector General stated that from January 1997 through December 1999, over 2,400 representative payees misused about $12 million in benefits. The SSA 

and the SSA Inspector General have recommended legislation to 

raise the standards for persons and organizations serving as representative payees and to impose stricter regulation and monetary 

penalties on those who mismanage benefits. 

In addition to protecting the financial security of vulnerable 

beneficiaries, this bill also picks up where P.L. 104–193, the Personal Responsibility and Work Opportunity Reconciliation Act of 

1996 (PRWORA), left off in ending benefit payments to fugitive felons and persons who violate their probation or parole. That legislation denied SSI benefits to such individuals; however, they are still 

allowed to receive Social Security benefits. The Congressional 

Budget Office estimates $525 million will be paid in benefits over 

the next 10 years out of the Social Security Trust Funds to these 

persons. In an August 2000 report, Old-Age, Survivors and Disability Insurance Benefits Paid to Fugitives, the SSA Inspector 

General estimated about 17,000 fugitives received Social Security 

benefits between PRWORA’s enactment and 1999, and recommended legislation prohibiting payment of Social Security benefits to fugitive felons and probation or parole violators, similar to 

the SSI provision. 

The Protection Act also incorporates recommendations by the 

SSA Inspector General to provide tools that further safeguard Social Security programs, help shield Social Security employees from 

harm while conducting their duties, expand the Inspector General’s 

ability to stop perpetrators of fraud through new civil monetary 

penalties, and prevent persons from misrepresenting themselves as 

they provide Social Security-related services. 

In addition to addressing waste, fraud, and abuse, the bill helps 

individuals with disabilities by making it easier for them to obtain 

legal representation when applying for benefits by improving the 

25

attorney fee withholding process. Advocates for individuals with 

disabilities and claimants’ representatives have stated in hearings 

before the Subcommittee on Social Security that allowing attorneys 

and claimants for Social Security benefits to sign an agreement requiring the Commissioner to pay the attorney directly from the 

claimant’s past-due benefits has helped ensure there is a pool of 

private attorneys who are willing and able to help claimants pursue benefits. Extending attorney fee withholding to SSI cases 

would help expand the pool of attorneys willing to help many lowincome SSI claimants to successfully pursue needed benefits. Likewise, advocates for claimant representatives have testified that the 

SSA’s processing fee for withholding the attorney’s fee from pastdue benefits is excessive, limits the pool of attorneys willing to help 

claimants, and that reducing the fee would increase availability of 

representation for claimants. 

Besides encouraging representation of claimants seeking benefits, advocates for individuals with disabilities have discussed at 

hearings and consultations with the Subcommittee on Social Security the need to improve and clarify provisions of the Ticket to 

Work program by enhancing demonstration projects, making work 

incentive services available to more individuals, and expanding eligibility for the Work Opportunity Tax Credit. These recommendations are all intended to encourage more disabled beneficiaries to 

return to work or maintain work effort. 

Finally, the bill contains numerous provisions recommended by 

the SSA aimed at correcting inequities in the law regarding benefit 

coverage and receipt, as well as making technical corrections to the 

law. One of these provisions resulted from an August 2002 General 

Accounting Office (GAO) report, Social Security Administration: 

Revision to the Government Pension Offset Exemption Should Be 

Considered. The GAO found that teachers in Texas, and to a lesser 

extent in Georgia, were using a loophole in the law in order to receive higher spouse or survivor benefits from Social Security. In effect, teachers contributed to Social Security for as little as one day 

(an average of $3 in payroll taxes) and qualified for over $100,000 

in spouse or survivor benefits over a lifetime, whereas similar 

workers who paid into Social Security throughout their careers received little or no spouse or survivor benefits. The GAO recommended amending the law to treat State and local workers the 

same as Federal workers in applying the exemption. 

C. LEGISLATIVE HISTORY

During the 106th Congress, the Subcommittee held hearings on 

Social Security program integrity on March 30, 2000 (106–38); representative payees on May 4, 2000 (106–57); Social Security number use and misuse on May 9 and 11 (106–108), and July 17, 2000 

(106–43); and the processing of attorney’s fees on June 14, 2000 

(106–70). The information gained from these hearings led to the introduction of H.R. 4857, the ‘‘Social Security Number Privacy and 

Identity Theft Prevention Act of 2000,’’ to enhance privacy protections for individuals, prevent fraudulent misuse of the Social Security number, and provide additional safeguards for Social Security 

and Supplemental Security Income beneficiaries with representative payees. In addition, H.R. 4633 was introduced to improve the 

SSA payment system for representation of claimants. On July 20, 

26

2000, the Subcommittee ordered favorably reported H.R. 4857, as 

amended. The Committee on Ways and Means ordered the bill favorably reported, as amended on September 28, 2000 (H. Rept. 

106–996 Part 1). The bill was not considered by the full House, as 

other committees of jurisdiction did not complete consideration of 

the bill. 

In the 107th Congress, on May 10, 2001, the Subcommittee on 

Social Security held a hearing on the integrity of Social Security 

programs (107–30). The Subcommittee heard testimony from SSA 

Inspector General James G. Huse about the need to prohibit payment of Social Security benefits to fugitive felons and improve oversight of representative payees. Fritz Streckewald, Acting Assistant 

Deputy Commissioner of Disability and Income Security Programs 

of the SSA, testified about the agency’s efforts to improve oversight 

of representative payees and stop SSI payments to fugitive felons. 

Advocates of individuals with disabilities expressed support for legislation to improve oversight of representative payees and protect 

beneficiaries from benefit misuse by representative payees. 

On May 17, 2001, the Subcommittee on Social Security held a 

hearing on processing of attorneys’ fees (107–24). Barbara Bovbjerg 

of the General Accounting Office (GAO) provided testimony on the 

estimated costs SSA incurs in withholding attorneys’ fees from 

past-due benefits of claimants for Title II benefits, as well as ways 

the SSA could improve its processing of attorneys’ fees. Advocates 

for claimants’ representatives testified about the need to reduce the 

SSA’s processing fees in order to encourage attorneys to accept 

cases of claimants seeking Social Security benefits. Advocates for 

claimants’ representatives and advocates for individuals with disabilities testified about the need to extend withholding of attorneys’ fees from past-due SSI benefits in order to increase the pool of attorneys willing to accept SSI cases. 

On July 26, 2001, the Subcommittee on Social Security held a 

hearing on misleading mailings targeted to seniors (107–44). SSA 

Inspector General James G. Huse testified on how use of certain 

phrases and other devices gives the false impression of Federal 

agency endorsement or origination and is used to mislead seniors 

into providing personal information and/or sending money. 

Information obtained during these hearings and those of the 

106th Congress led to the introduction of H.R. 4070, the ‘‘Social Security Program Protection Act of 2002.’’ On April 25, 2002, the Subcommittee on Social Security ordered favorably reported to the full 

Committee H.R. 4070, the ‘‘Social Security Program Protection Act 

of 2002,’’ on a voice vote, with a quorum present. On June 25, 2002, 

H.R. 4070, as amended, was considered by the House of Representatives under suspension of the rules. On June 26, 2002, the House 

of Representatives agreed to H.R. 4070 by a recorded vote of 425–

0. On November 18, 2002, H.R. 4070, as amended, was passed by 

the Senate by unanimous consent. The bill, as amended by the 

Senate, was not considered by the House of Representatives prior 

to adjournment of the 107th Congress. 

Information obtained during hearings in the 106th and 107th 

Congress, as well as bipartisan support for H.R. 4070, led to introduction of H.R. 743, the ‘‘Social Security Protection Act of 2003.’’

On February 27, 2003, the Subcommittee on Social Security held 

a hearing on the legislation. SSA Inspector General James G. Huse 

27

testified in favor of the bill’s provisions to improve representative 

payee selection and monitoring, to stop Social Security benefit payments to fugitive felons, and to provide civil monetary penalties for 

certain fraudulent or misleading activities like withholding material information in order to obtain or increase benefits. Barbara 

Bovbjerg and Dan Bertoni of the GAO provided testimony on the 

bill’s provision implementing the GAO’s recommendation to address abuse of the GPO exemption. Advocates for individuals with 

disabilities testified in support of the bill’s provisions to extend attorney fee withholding to SSI claims, improve beneficiary protections with regard to representative payees, and provide improvement and clarification of certain Ticket to Work provisions. Advocates for claimants’ representatives provided testimony regarding 

the bill’s provisions to extend attorney fee withholding and cap the 

SSA’s processing fee on attorney fee withholding. 

On March 5, H.R. 743, as amended, was considered by the House 

of Representatives under suspension of the rules, and failed by a 

vote of 249–180. On March 13, 2003, the Committee on Ways and 

Means ordered favorably reported H.R. 743, the ‘‘Social Security 

Protection Act,’’ as amended, by a rollcall vote of 35–2.

II. EXPLANATION OF THE BILL 

TITLE I. PROTECTION OF BENEFICIARIES 

Subtitle A. Representative Payees 

A. AUTHORITY TO REISSUE BENEFITS MISUSED BY ORGANIZATIONAL

REPRESENTATIVE PAYEES

(Sec. 101 of the Bill) 

PRESENT LAW

The Social Security Act requires the re-issuance of benefits misused by any representative payee when the Commissioner finds 

that the Social Security Administration (SSA) negligently failed to 

investigate and monitor the payee. 

REASON FOR CHANGE

There have been a number of highly publicized cases involving 

organizational representative payees that have misused large sums 

of monies paid to them on behalf of the Social Security and Supplemental Security Income (SSI) beneficiaries they represented. In 

most instances, these organizations operated as criminal enterprises, bent not only on stealing funds from beneficiaries, but also 

on carefully concealing the evidence of their wrongdoing. These illegal activities went undetected until large sums had been stolen. If 

the SSA is not shown to be negligent for failing to investigate and 

monitor the payee, affected beneficiaries may never be repaid or 

may be repaid only when the representative payee committing misuse makes restitution to the SSA. 

Benefit misuse by representative payees who serve a number of 

beneficiaries can be difficult to detect, since it often involves victims that may have no family members or friends willing or able 

to help them. Requiring the SSA to reissue benefit payments to 

these victims of benefit misuse provides essential protection from 

28

financial hardship. Moreover, extending the provision to cases involving individual payees serving fewer beneficiaries may lead to 

fraudulent claims of misuse. These claims, which often turn on information available only from close family members, would be difficult to assess. Similarly, extension of this provision to these cases 

could potentially encourage misuse or poor money management by 

these individual representative payees, if they believe the SSA 

could eventually pay the beneficiary a second time. 

EXPLANATION OF PROVISION

In addition to cases where the SSA negligently failed to investigate and monitor the payee, the provision also requires the Commissioner to re-issue benefits under Titles II, VIII and XVI in any 

case in which a beneficiary’s funds are misused by a representative 

payee that is not an individual (regardless of whether it is a qualified organization such as a State/local agency or a community nonprofit social service agency) or an individual payee representing 15 

or more beneficiaries. 

The new provision defines misuse as any case in which a representative payee converts the benefits entrusted to his or her care 

for purposes other than the ‘‘use and benefit’’ of the beneficiary, 

and authorizes the Commissioner to define ‘‘use and benefit’’ in 

regulation. 

In crafting a regulatory definition for ‘‘use and benefit,’’ the Commissioner should take special care to distinguish between the situation in which the representative payee violates his or her responsibility by converting the benefits to further the payee’s own self interest, and the situation in which the payee faithfully serves the 

beneficiary by using the benefits in a way that principally aids the 

beneficiary but which also incidentally aids the payee or another 

individual. For instance, cases in which a representative payee 

uses the benefits entrusted to his or her care to help pay the rent 

on an apartment that he or she and the beneficiary share should 

not be considered misuse. 

EFFECTIVE DATE

Applies to any cases of benefit misuse by a representative payee 

with respect to which the Commissioner makes the determination 

of misuse on or after January 1, 1995. This protects the interests 

of beneficiaries affected by cases of egregious misuse that have 

been identified in recent years. 

B. OVERSIGHT OF REPRESENTATIVE PAYEES

(Sec. 102 of the Bill) 

PRESENT LAW

Present law requires community-based nonprofit social service 

agencies serving as representative payees to be licensed or bonded. 

Payees are not required to submit proof of bonding or licensing, 

and they are not subject to independent audits. In addition, there 

is no provision requiring periodic on-site reviews of organizational 

payees (other than the accountability monitoring done for State institutions that serve as representative payees). 

29

REASON FOR CHANGE

Strengthening the bonding and licensing requirements for community-based nonprofit social service agencies would add further 

safeguards to protect beneficiaries’ funds. State licensing provides 

for some oversight by the State into the organization’s business 

practices, and bonding provides some assurances that a surety company has investigated the organization and approved it for the 

level of risk associated with the bond. Requiring annual certification as to the licensing and bonding of the payee, as well as submission of audits performed, should help prevent a payee from 

dropping their licensing or bonding subsequent to the SSA approving them as payee.

On-site periodic visits should be conducted regularly to reduce 

misuse of funds. To the degree possible, appropriate auditing and 

accounting standards should be utilized in conducting such reviews. 

EXPLANATION OF PROVISION

The new provision requires community-based nonprofit social 

service agencies serving as representative payees to be both bonded 

and licensed (provided that licensing is available in the State). In 

addition, such representative payees must submit yearly proof of 

bonding and licensing, as well as copies of any independent audits 

that were performed on the payee since the previous certification. 

The new provision also requires the Commissioner of Social Security to conduct periodic onsite reviews of: (1) a person who serves 

as a representative payee to 15 or more beneficiaries; (2) community-based nonprofit social service agencies serving as representative payees; and, (3) any agency that serves as the representative 

payee to 50 or more beneficiaries. In addition, the Commissioner is 

required to submit an annual report to the Committee on Ways 

and Means of the House of Representatives and the Committee on 

Finance of the Senate on the reviews conducted in the prior fiscal 

year. 

EFFECTIVE DATE

The bonding, licensing, and audit provisions are effective on the 

first day of the 13th month following enactment of the legislation. 

The periodic on-site review provision is effective upon enactment. 

C. DISQUALIFICATION FROM SERVICE AS REPRESENTATIVE PAYEE OF

PERSONS CONVICTED OF OFFENSES RESULTING IN IMPRISONMENT

FOR MORE THAN 1 YEAR, OR FLEEING PROSECUTION, CUSTODY OR

CONFINEMENT

(Sec. 103 of the Bill) 

PRESENT LAW

Sections 205, 807, and 1631 of the Social Security Act disqualify 

individuals from being representative payees if they have been convicted of fraudulent conduct involving Social Security programs. 

30

REASON FOR CHANGE

Prohibiting persons convicted of offenses resulting in imprisonment for more than one year and persons fleeing prosecution, custody or confinement for a felony from serving as representative 

payees decreases the likelihood of mismanagement or abuse of 

beneficiaries’ funds. Also, allowing such persons to serve as representative payees could raise serious questions about the SSA’s 

stewardship of taxpayer funds. The agency’s report will assist Congress in its oversight of the representative payee program. 

EXPLANATION OF PROVISION

The new provision expands the scope of disqualification to prohibit an individual from serving as a representative payee if he or 

she has been convicted of an offense resulting in imprisonment for 

more than one year, unless the Commissioner determines that 

payee status would be appropriate despite the conviction. It also 

disqualifies persons fleeing prosecution, custody, or confinement for 

a felony from being representative payees. Finally, the Commissioner shall assist law enforcement officials in apprehending such 

persons by providing them with the address, Social Security number, photograph, or other identifying information. 

The new provision requires the Commissioner, in consultation 

with the SSA Inspector General, to submit a report to the Committee on Ways and Means of the House of Representatives and 

the Committee on Finance of the Senate evaluating existing procedures and reviews conducted for representative payees to determine whether they are sufficient to protect benefits from being misused. 

EFFECTIVE DATE

The first day of the 13th month beginning after the date of enactment, except that the report to Congress is due no later than 270 

days after the date of enactment. 

D. FEE FORFEITURE IN CASE OF BENEFIT MISUSE BY

REPRESENTATIVE PAYEES

(Sec. 104 of the Bill) 

PRESENT LAW

Certain qualified organizations are authorized to collect a fee for 

their services. The fee, which is determined by a statutory formula, 

is deducted from the beneficiary’s benefit payments. 

REASON FOR CHANGE

Payees who misuse their clients’ funds are not properly performing the service for which the fee was paid; therefore, they 

should forfeit such fees. Permitting the payee to retain the fees is 

tantamount to rewarding the payee for violating his or her responsibility to use the benefits for the individual’s needs. 

EXPLANATION OF PROVISION

The new provision requires representative payees to forfeit the 

fee for those months during which the representative payee misVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00030 Fmt 6659 Sfmt 6602 E:\HR\OC\HR046.XXX HR046
31

used funds, as determined by the Commissioner of Social Security 

or a court of competent jurisdiction.

EFFECTIVE DATE

Applies to any month involving benefit misuse by a representative payee as determined by the Commissioner or a court of competent jurisdiction after 180 days after the date of enactment. 

E. LIABILITY OF REPRESENTATIVE PAYEES FOR MISUSED BENEFITS

(Sec. 105 of the Bill) 

PRESENT LAW

Although the SSA has been provided with expanded authority to 

recover overpayments (such as the use of tax refund offsets, referral to contract collection agencies, notification of credit bureaus, 

and administrative offsets of future Federal benefit payments), 

these tools cannot be used to recoup benefits misused by a representative payee. 

REASON FOR CHANGE

Treating misused benefits as overpayments to the representative 

payee would provide the SSA with additional means for recovering 

misused payments. 

EXPLANATION OF PROVISION

The new provision treats benefits misused by any representative 

payee (except a Federal, State or local government agency) as an 

overpayment to the representative payee, thus subjecting the representative payee to current overpayment recovery authorities. Any 

recovered benefits not already reissued to the beneficiary pursuant 

to Section 101 of this legislation would be reissued to either the 

beneficiary or their alternate representative payee, up to the total 

amount misused. 

EFFECTIVE DATE

Applies to benefit misuse by a representative payee in any case 

where the Commissioner of Social Security or a court of competent 

jurisdiction makes a determination of misuse after 180 days after 

the date of enactment. 

F. AUTHORITY TO REDIRECT DELIVERY OF BENEFIT PAYMENTS

WHEN A REPRESENTATIVE PAYEE FAILS TO PROVIDE REQUIRED

ACCOUNTING

(Sec. 106 of the Bill) 

PRESENT LAW

The Social Security Act requires representative payees to submit 

accounting reports to the Commissioner of Social Security regarding how a beneficiary’s benefit payments were used. A report is required at least annually, but may be required by the Commissioner 

at any time if the Commissioner has reason to believe the representative payee is misusing benefits. 

32

REASON FOR CHANGE

Accounting reports are an important means of monitoring the activities of representative payees to prevent misuse of benefits. Redirecting benefit payments to the field office would enable the 

agency to promptly address the failure of the representative payee 

to file a report. 

EXPLANATION OF PROVISION

The new provision authorizes the Commissioner of Social Security to require a representative payee to receive any benefits under 

Titles II, VIII, and XVI in person at a Social Security field office 

if the representative payee fails to provide a required accounting 

of benefits. The Commissioner would be required to provide proper 

notice and the opportunity for a hearing prior to redirecting benefits to the field office. 

EFFECTIVE DATE

180 days after the date of enactment. 

Subtitle B: Enforcement 

G. CIVIL MONETARY PENALTY AUTHORITY WITH RESPECT TO

WRONGFUL CONVERSIONS BY REPRESENTATIVE PAYEES

(Sec. 111 of the Bill) 

PRESENT LAW

Section 1129 of the Social Security Act authorizes the Commissioner to impose a civil monetary penalty (of up to $5,000 for each 

violation) along with an assessment (up to twice the amount 

wrongly paid), upon any person who knowingly uses false information or knowingly omits information to wrongly obtain Title II, VIII 

or XVI benefits. 

REASON FOR CHANGE

Providing authority for SSA to impose civil monetary penalties 

along with an assessment of up to twice the amount of misused 

benefits would provide the SSA with an additional means to address benefit misuse by representative payees. 

EXPLANATION OF PROVISION

The new provision expands civil monetary penalties authority 

under Section 1129 to include misuse of Title II, VIII or XVI benefits by representative payees. A civil monetary penalty of up to 

$5,000 may be imposed for each violation, along with an assessment of up to twice the amount of misused benefits.

EFFECTIVE DATE

Applies to violations committed after the date of enactment. 

33

TITLE II. PROGRAM PROTECTIONS 

A. CIVIL MONETARY PENALTY AUTHORITY WITH RESPECT TO

KNOWING WITHHOLDING OF MATERIAL FACTS

(Sec. 201 of the Bill) 

PRESENT LAW

Section 1129 of the Social Security Act, 42 U.S.C. § 1320a–8, authorizes the Commissioner of Social Security to impose civil monetary penalties and assessments on any person who makes a statement or representation of a material fact for use in determining 

initial or continuing rights to Title II, VIII, or XVI benefits that the 

person knows or should know omits a material fact or is false or 

misleading. In order for the penalty or assessment to be imposed, 

the law requires an affirmative act on the part of the individual of 

making (or causing to be made) a statement that omits a material 

fact or is false or misleading. 

Section 1129A, 42 U.S.C. 1320a–8a, provides administrative procedures for imposing penalties of nonpayment of Title II and XVI 

benefits (6 months for the first violation) for making false statements. 

REASON FOR CHANGE

Currently the SSA cannot impose civil monetary penalties and 

assessments on a person who should have come forward to notify 

the SSA of changed circumstances that affect eligibility or benefit 

amount, but did not. To be subject to civil monetary penalties and 

assessments under the current law, an individual must have made 

a statement that omitted a material fact or was false or misleading. Examples of the types of individuals intended to be covered under this amendment to Section 1129 and 1129A include (but 

are not limited to): (1) an individual who has a joint bank account 

with a beneficiary in which the SSA direct deposited the beneficiary’s Social Security checks; upon the death of the beneficiary, 

this individual fails to advise the SSA of the beneficiary’s death, instead spending the proceeds from the deceased beneficiary’s Social 

Security checks; and (2) an individual who is receiving benefits 

under one SSN while working under another SSN. 

This amendment is intended to close this loophole in the current 

law, but is not intended to expand Section 1129 and 1129A to include those individuals whose failure to come forward to notify the 

SSA was not done for the purpose of improperly obtaining or continuing to receive benefits. For instance, it is not intended that the 

expanded authority be used against individuals who do not have 

the capacity to understand that their failure to come forward is 

misleading. 

EXPLANATION OF PROVISION

By including the phrase ‘‘or otherwise withholds disclosure of,’’ in 

Section 1129 and 1129A, civil monetary penalties and assessments 

and sanctions could also be imposed for failure to come forward 

and notify the SSA of changed circumstances that affect eligibility 

or benefit amount when that person knows or should know that the 

failure to come forward is misleading. 

34

EFFECTIVE DATE

Applies to violations committed after the date on which the Commissioner implements the centralized computer file described in 

Section 202. 

B. ISSUANCE BY COMMISSIONER OF SOCIAL SECURITY OF RECEIPTS

TO ACKNOWLEDGE SUBMISSION OF REPORTS OF CHANGES IN

WORK OR EARNINGS STATUS OF DISABLED BENEFICIARIES

(Sec. 202 of the Bill) 

PRESENT LAW

Changes in work or earnings status can affect a Title II disability 

beneficiary’s right to continued entitlement to disability benefits. 

Changes in the amount of earned income can also affect an SSI recipient’s continued eligibility for SSI benefits or his or her monthly 

benefit amount. 

The Commissioner has promulgated regulations that require 

Title II disability beneficiaries to report changes in work or earnings status (20 CFR, § 404.1588) and regulations that require SSI 

recipients (or their representative payees) to report any increase or 

decrease in income (20 CFR, §§ 416.704-416.714). 

REASON FOR CHANGE

Witnesses have testified before the Social Security Subcommittee 

and the Human Resources Subcommittee that the SSA does not 

currently have an effective system in place for processing and recording Title II and Title XVI disability beneficiaries’ reports of 

changes in work and earnings status. Issuing receipts to disabled 

beneficiaries who make such reports would provide them with proof 

that they had properly fulfilled their obligation to report these 

changes. 

EXPLANATION OF PROVISION

The new provision requires the Commissioner to issue a receipt 

to a disabled beneficiary (or representative of a beneficiary) who reports a change in his or her work or earnings status. The Commissioner is required to continue issuing such receipts until the Commissioner has implemented a centralized computer file that would 

record the date on which the disabled beneficiary (or representative) reported the change in work or earnings status.

This provision requires the Commissioner to begin issuing receipts as soon as possible, but no later than one year after the date 

of enactment. The Committee on Ways and Means is aware that 

the SSA has developed software known as the Modernized Return 

to Work System (MRTW). This software will assist SSA employees 

in recording information about changes in work and earnings status and in making determinations of whether such changes affect 

continuing entitlement to disability benefits. The software also has 

the capability of automatically issuing receipts. The SSA has informed the Committee on Ways and Means that this software is already in use in some of the agency’s approximately 1300 local field 

offices, and that the SSA expects to put it into operation in the remainder of the field offices over the next year. The Committee on 

35

Ways and Means expects that the SSA field offices that are already 

using the MRTW system will immediately begin issuing receipts to 

disabled beneficiaries who report changes in work or earnings status, and that the SSA will require the other field offices to begin 

issuing receipts as these offices begin using the MRTW system over 

the next year. For disabled Title XVI beneficiaries, if the SSA 

issues a notice to the beneficiary immediately following the report 

of earnings that details the effect of the change in income on the 

monthly benefit amount, this notice would serve as a receipt. 

EFFECTIVE DATE

Requires the Commissioner to begin issuing receipts as soon as 

possible, but no later than one year after the date of enactment. 

C. DENIAL OF TITLE II BENEFITS TO PERSONS FLEEING PROSECU- TION, CUSTODY, OR CONFINEMENT, AND TO PERSONS VIOLATING

PROBATION OR PAROLE

(Sec. 203 of the Bill) 

PRESENT LAW

The ‘‘Personal Responsibility and Work Opportunity Reconciliation Act of 1996,’’ (PRWORA) P.L. 104–193, included provisions 

making persons ineligible to receive SSI benefits during any month 

in which they are fleeing to avoid prosecution, custody, or confinement for a felony, or if they are in violation of a condition of probation or parole. However, this prohibition was not extended to Social 

Security benefits under Title II. 

REASON FOR CHANGE

There are concerns that Social Security benefits, not just Supplemental Security Income and other welfare benefits, are being used 

to aid flight from justice or other crime. The Congressional Budget 

Office has estimated that persons fleeing to avoid prosecution for 

a felony or to avoid custody or confinement after conviction for a 

felony, or in violation of a condition of probation or parole, will receive $526 million in Title II Social Security benefits over the next 

10 years. The Social Security Inspector General (SSA IG) recommended changing the law to prohibit fugitive felons and other 

criminals from receiving benefits. 

The provision gives the Commissioner authority to pay withheld 

Title II benefits if there is ‘‘good cause.’’ The Commissioner would 

be required to develop regulations within one year of the date of 

enactment. This ‘‘good cause’’ discretion is authorized for the Commissioner in cases of Title II benefits, where it was not authorized 

or intended for programs affected under the similar provision in 

PRWORA, because workers earn the right to receive benefits for 

themselves and their families through their career-long Social Security payroll tax contributions. 

The good cause exception will provide the Commissioner with the 

ability to pay benefits under circumstances in which the Commissioner deems withholding of benefits to be inappropriate—for example, but not limited to, situations when Social Security beneficiaries are found to be in flight from a warrant relating to a crime 

for which a court of competent jurisdiction finds the person not 

36

guilty, or if the charges are dismissed; if a warrant for arrest is vacated; or if probation or parole is not revoked. In such circumstances, it is expected that the Commissioner would pay benefits withheld from the beneficiary for which he or she was otherwise eligible but for the prohibition in this provision. 

In testimony received at a February 27, 2003 hearing, the Subcommittee was made aware of instances with respect to the SSI 

program where there may be mitigating circumstances relating to 

persons with outstanding warrants for their arrest. In addition, 

PRWORA implementing instructions have been found to vary between agencies. For example, the Department of Agriculture’s Food 

and Nutrition Service has issued instructions that in order to be 

considered ‘‘fleeing,’’ the individual must have knowledge a warrant 

has been issued for his or her arrest and that the State agency 

should verify the individual has such knowledge. In addition, once 

the person has knowledge of the warrant, either by having received 

it personally or by being advised of its existence by the State agency, he or she is technically ‘‘fleeing’’ at that time. Finally, the instructions strongly urge the State agency to give the individual an 

opportunity to submit documentation that the warrant has been 

satisfied. The Social Security Administration’s procedures do not 

include such instructions. 

The SSA IG is conducting an audit on implementation of the fugitive felon provision for the Supplemental Security Income program, which will shed light on the types of crimes beneficiaries 

committed, law enforcement’s pursuit of such criminals, the length 

of time benefits were suspended, the SSA’s handling of these cases, 

and other issues. The Subcommittee will continue to closely monitor these issues and encourages the Commissioner to review the 

agency’s implementing instructions in light of these circumstances 

and what constitutes flight under Federal law. 

EXPLANATION OF PROVISION

The new provision denies Social Security benefits under Title II 

to persons fleeing prosecution, custody or confinement for a felony, 

and to persons violating probation or parole. However, the Commissioner may, for good cause, pay withheld benefits. Finally, the 

Commissioner shall assist law enforcement officials in apprehending such persons by providing them with the address, Social 

Security number, photograph, or other identifying information.

EFFECTIVE DATE

First day of the first month that begins on or after the date that 

is 9 months after the date of enactment. 

D. REQUIREMENTS RELATING TO OFFERS TO PROVIDE FOR A FEE A

PRODUCT OR SERVICE AVAILABLE WITHOUT CHARGE FROM THE

SOCIAL SECURITY ADMINISTRATION

(Sec. 204 of the Bill) 

PRESENT LAW

Section 1140 of the Social Security Act prohibits or restricts various activities involving the use of Social Security and Medicare 

symbols, emblems, or references that give a false impression that 

37

an item is approved, endorsed, or authorized by the Social Security 

Administration, the Health Care Financing Administration (now 

the Centers for Medicare and Medicaid Services), or the Department of Health and Human Services. It also provides for the imposition of civil monetary penalties with respect to violations of the 

section. 

REASON FOR CHANGE

Several individuals and companies offer Social Security services 

for a fee even though the same services are available directly from 

the SSA free of charge. For example, the SSA’s Inspector General 

has encountered business entities that have offered assistance to 

individuals in changing their names (upon marriage) or in obtaining a Social Security number (upon the birth of a child) for a fee, 

even though these services are directly available from the SSA for 

free. The offer from the business entities either did not state at all, 

or did not clearly state, that these services were available from the 

SSA for free. These practices can mislead and deceive senior citizens, newlyweds, new parents, and other individuals seeking services or products, who may not be aware that the SSA provides 

these services for free. 

EXPLANATION OF PROVISION

Several individuals and companies offer Social Security-related 

services for a fee even though the same services are available directly from the SSA free of charge. The new provision requires persons or companies offering such services to include in their offer a 

statement that the services they provide for a fee are available directly from the SSA free of charge. The statements would be required to comply with standards promulgated through regulation 

by the Commissioner of Social Security with respect to their content, placement, visibility, and legibility. 

EFFECTIVE DATE

Applies to offers of assistance made after the sixth month following the issuance of these standards. Requires the Commissioner 

to promulgate regulations within 1 year after the date of enactment. 

E. REFUSAL TO RECOGNIZE CERTAIN INDIVIDUALS AS CLAIMANT

REPRESENTATIVES

(Sec. 205 of the Bill) 

PRESENT LAW

An attorney in good standing is entitled to represent claimants 

before the Commissioner of Social Security. The Commissioner may 

prescribe rules and regulations governing the recognition of persons other than attorneys representing claimants before the Commissioner. Under present law, attorneys disbarred in one jurisdiction, but licensed to practice in another jurisdiction, must be recognized as a claimant’s representative. 

38

REASON FOR CHANGE

This provision would provide additional protections for beneficiaries who may rely on representatives during all phases of their 

benefit application process. As part of their ongoing oversight of 

claimant representatives, the Committee on Ways and Means intends to review whether options to establish protections for claimants represented by non-attorneys should be considered. 

EXPLANATION OF PROVISION

The new provision authorizes the Commissioner to refuse to recognize as a representative, or disqualify as a representative, an attorney who has been disbarred or suspended from any court or bar, 

or who has been disqualified from participating in or appearing before any Federal program or agency. Due process (i.e., notice and 

an opportunity for a hearing) would be required before taking such 

action. Also, if a representative has been disqualified or suspended 

as a result of collecting an unauthorized fee, full restitution is required before reinstatement can be considered. 

EFFECTIVE DATE

Upon enactment. 

F. PENALTY FOR CORRUPT OR FORCIBLE INTERFERENCE WITH

ADMINISTRATION OF THE SOCIAL SECURITY ACT

(Sec. 206 of the Bill) 

PRESENT LAW

No provision. 

REASON FOR CHANGE

This provision extends to SSA employees the same protections 

provided to employees of the Internal Revenue Service under the 

Internal Revenue Code of 1954. These protections will allow SSA 

employees to perform their work with more confidence that they 

will be safe from harm. 

The Internal Revenue Manual defines the term ‘‘corruptly’’ as follows:

‘‘Corruptly’’ characterizes an attempt to influence any official in his or her official capacity under this title by any 

improper inducement. For example, an offer of a bribe or 

a passing of a bribe to an Internal Revenue employee for 

the purpose of influencing him or her in the performance 

of his or her official duties is corrupt interference with the 

administration of Federal laws. (Internal Revenue Manual, 

[9.5] 11.3.2.2, 4–09–1999.) 

EXPLANATION OF PROVISION

The new provision imposes a fine of not more than $5,000, imprisonment of not more than 3 years, or both, for attempting to intimidate or impede—corruptly or by using force or threats of 

force—any Social Security Administration (SSA) officer, employee 

or contractor (including State employees of disability determination 

services and any individuals designated by the Commissioner) 

39

while they are acting in their official capacities under the Social 

Security Act. If the offense is committed only by threats of force, 

the offender is subject to a fine of not more than $3,000, no more 

than one year in prison, or both. 

The Committee on Ways and Means expects that judgment will 

be used in enforcing this section. Social Security and SSI disability 

claimants and beneficiaries, in particular, are frequently subject to 

multiple, severe life stressors, which may include severe physical, 

psychological, or financial difficulties. In addition, disability claimants or beneficiaries who encounter delays in approval of initial 

benefit applications or in post-entitlement actions may incur additional stress, particularly if they have no other source of income. 

Under such circumstances, claimants or beneficiaries may at times 

express frustration in an angry manner, without truly intending to 

threaten or intimidate SSA employees. In addition, approximately 

25 percent of Social Security disability beneficiaries and 35 percent 

of disabled SSI recipients have mental impairments, and such individuals may be less able to control emotional outbursts. These factors should be taken into account in enforcing this provision. 

EFFECTIVE DATE

Upon enactment. 

G. USE OF SYMBOLS, EMBLEMS, OR NAMES IN REFERENCE TO SOCIAL

SECURITY OR MEDICARE

(Sec. 207 of the Bill) 

PRESENT LAW

Section 1140 of the Social Security Act prohibits (subject to civil 

penalties) the use of Social Security or Medicare symbols, emblems 

and references on any item in a manner that conveys the false impression that such item is approved, endorsed or authorized by the 

Social Security Administration, the Health Care Financing Administration (now the Centers for Medicare and Medicaid Services) or 

the Department of Health and Human Services. 

REASON FOR CHANGE

The SSA Inspector General has found these phrases appearing in 

mailings, solicitations, or flyers, which, when used with the SSA’s 

words, symbols, emblems, and references may be particularly misleading and more likely to convey the false impression that such 

item is approved, endorsed, or authorized by the SSA, the Health 

Care Financing Administration (now the Centers for Medicare and 

Medicaid Services), or the Department of Health and Human Services. Expansion of this list helps to ensure that individuals receiving any type of mail, solicitations or flyers bearing symbols, emblems or names in reference to Social Security or Medicare are not 

misled into believing that these agencies approved or endorsed the 

services or products depicted. 

EXPLANATION OF PROVISION

The new provision expands the prohibition in present law to several other references to Social Security and Medicare. This inVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00039 Fmt 6659 Sfmt 6602 E:\HR\OC\HR046.XXX HR046
40

cludes, but is not limited to, ‘‘Death Benefits Update,’’ ‘‘Federal 

Benefits Information,’’ and ‘‘Final Supplemental Plan.’’

EFFECTIVE DATE

Applies to items sent after 180 days after the date of enactment. 

H. DISQUALIFICATION FROM PAYMENT DURING TRIAL WORK PERIOD

UPON CONVICTION OF FRAUDULENT CONCEALMENT OF WORK AC- TIVITY

(Sec. 208 of the Bill) 

PRESENT LAW

An individual entitled to disability benefits under Title II is entitled to a ‘‘trial work period’’ to test his or her ability to work. The 

trial work period allows beneficiaries to have earnings from work 

above a certain amount ($570 a month in 2003) for up to 9 months 

(which need not be consecutive) within any 60-month period without any loss of benefits. Presently, Section 222(c) of the Social Security Act does not prohibit a person entitled to disability benefits 

under Title II from receiving disability benefits during a trial work 

period, even if convicted by a Federal court for fraudulently concealing work activity during that period. 

The SSA’s Inspector General has pursued prosecution of Title II 

disability beneficiaries who fraudulently conceal work activity by 

applying several criminal statutes, including Section 208(a) of the 

Social Security Act, and Sections 371 and 641 of Title 18 of the 

United States Code (Crimes and Criminal Procedures).

REASON FOR CHANGE

Under current law, if an individual is convicted of fraudulently 

concealing work activity, the dollar loss to the government is calculated based on the benefits that the individual would have received had he or she not concealed the work activity. During the 

trial work period, disability beneficiaries continue to receive their 

monthly benefit amount regardless of their work activity. Therefore, the SSA does not include benefits paid during a trial work period in calculating the total dollar loss to the government, even if 

the individual fraudulently concealed work activity during that period. As a result, the dollars lost to the government may fall below 

the thresholds set by the United States Attorneys in cases involving fraudulent concealment of work by Title II disability beneficiaries. In such situations, the case would not be prosecuted, even 

if the evidence of fraud were very clear. 

This provision rectifies the situation by establishing that individuals convicted of fraudulently concealing work activity during the 

trial work period are not entitled to receive any disability benefits 

for trial work period months prior to the conviction (but within the 

same period of disability). 

EXPLANATION OF PROVISION

Under the new provision, an individual convicted by a Federal 

court of fraudulently concealing work activity from the Commissioner of Social Security would not be entitled to receive any disability benefits in any trial work period month and would be liable 

41

for repayment of those benefits, in addition to any restitution, penalties, fines or assessments otherwise due. 

Under this provision, concealing work activity is considered to be 

fraudulent if the individual: (1) provided false information to the 

SSA about his or her earnings during that period; (2) worked under 

another identity, including under another person’s or a false Social 

Security number; or (3) took other actions to conceal work activity 

with the intent to receive benefits to which he or she was not entitled. 

EFFECTIVE DATE

Effective with respect to work activity performed after the date 

of enactment. 

I. AUTHORITY FOR JUDICIAL ORDERS OF RESTITUTION

(Sec. 209 of the Bill) 

PRESENT LAW

A court may order restitution when sentencing a defendant convicted of various offenses under Titles 18, 21, and 49 of the United 

States Code. However, violations of the Social Security Act (42 

U.S.C.) are not included among those for which the court may 

order restitution. 

REASON FOR CHANGE

This provision would enhance a judge’s ability to compensate the 

programs and punish persons convicted of violations including, but 

not limited to, improper receipt of Social Security payments and 

misuse of Social Security numbers. 

EXPLANATION OF PROVISION

This provision amends the Social Security Act to allow a Federal 

court to order restitution to the Social Security Administration for 

violations of the Social Security Act. Restitution in connection with 

benefit misuse by a representative payee would be credited to the 

Social Security Trust Funds for cases involving OASDI recipients 

and to the general fund for cases involving Supplemental Security 

Income and Special Veterans benefits. Other restitution funds, 

credited to a special fund established in the Treasury, would be 

available to defray expenses incurred in implementing Title II, 

Title VIII, and Title XVI. If the court does not order restitution, or 

only orders partial restitution, the court must state the reason on 

the record. 

EFFECTIVE DATE

Effective with respect to violations occurring on or after the date 

of enactment. 

42

TITLE III—ATTORNEY FEE PAYMENT SYSTEM 

IMPROVEMENTS 

A. CAP ON ATTORNEY ASSESSMENTS

(Sec. 301 of the Bill) 

PRESENT LAW

If there is an agreement between the claimant and the attorney, 

the Social Security Act requires the SSA to pay attorney fees for 

Title II claims directly to the attorney out of the claimant’s pastdue benefits. The SSA charges an assessment, at a rate not to exceed 6.3 percent of approved attorney fees, for the costs of determining, processing, withholding, and distributing attorney fees. 

REASON FOR CHANGE

Testimony was given at a House oversight hearing in May 2001 

on the SSA’s processing of attorney representatives’ fees that the 

amount of the fee assessment is unfair to these attorneys, who provide an important service to claimants. The attorneys who receive 

fee payments from the agency have their gross revenue reduced by 

6.3 percent. As a result of this revenue loss and the time it takes 

for the SSA to issue the fee payments to attorneys, a number of 

attorneys have decided to take fewer or none of these cases. The 

cap on the amount of the assessment would help ensure that 

enough attorneys remain available to represent claimants before 

the Social Security Administration.

The Committee on Ways and Means continues to be concerned 

about the agency’s processing time for attorney representative fee 

payments and expects the SSA to further automate the payment 

process as soon as possible. 

EXPLANATION OF PROVISION

The new provision imposes a cap of $75 on the 6.3 percent assessment on approved attorney representative fees for Title II 

claims. The cap is indexed annually for inflation. 

EFFECTIVE DATE

After 180 days after the date of enactment. 

B. EXTENSION OF ATTORNEY FEE PAYMENT SYSTEM TO TITLE XVI 

CLAIMS

(Sec. 302 of the Bill) 

PRESENT LAW

If there is an agreement between the claimant and the attorney, 

the Social Security Act requires attorney fees for Title II claims to 

be paid by the SSA directly to the attorney out of the claimant’s 

past-due benefits (subject to an assessment to cover the SSA’s 

costs). However, attorney fees for Title XVI claims are not paid directly by the SSA out of past-due benefits. Instead, the attorney 

must collect the fee from the beneficiary. 

43

REASON FOR CHANGE

Withholding the attorney fee payments from the SSI benefit 

claim would improve SSI applicants’ access to representation, as 

more attorneys would be willing to represent claimants if they are 

guaranteed payment. 

Payment of States first and attorneys second would ensure that 

States providing interim assistance to individuals would not receive 

less reimbursement, while also providing a method of ensuring that 

attorneys receive payment and continue to provide representation. 

EXPLANATION OF PROVISION

The provision would extend direct fee payment to attorneys out 

of past-due benefits for Title XVI claims. It would also authorize 

the SSA to charge a processing assessment of up to 6.3 percent of 

the approved attorney fees, subject to a cap of $75 that is indexed 

for inflation. The provision would sunset with respect to agreements for representation entered into after 5 years after the implementation date. 

In addition, in cases where the States would be reimbursed for 

interim assistance they had provided to a beneficiary awaiting a 

decision on a claim for SSI benefits, the State would be paid first, 

and the attorney would be paid second out of the past-due benefit 

amount. 

The provision also requires the General Accounting Office to conduct a study of claimant representation in the Social Security and 

Supplemental Security Income programs. The study will include an 

evaluation of the potential results of extending the fee withholding 

process to non-attorney representatives. 

EFFECTIVE DATE

Applies with respect to fees for representation that are first required to be certified or paid on or after the first day of the first 

month that begins after 270 days after the date of enactment. The 

GAO report is due to the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the 

Senate not later than 1 year after the date of enactment. 

TITLE IV: MISCELLANEOUS AND TECHNICAL AMENDMENTS 

Subtitle A: Amendments Relating to the Ticket to Work and Work 

Incentives Improvement Act of 1999 

A. APPLICATION OF DEMONSTRATION AUTHORITY SUNSET DATE TO

NEW PROJECTS

(Sec. 401 of the Bill) 

PRESENT LAW

Section 234 of the Social Security Act provides the Commissioner 

with general authority to conduct demonstration projects for the 

disability insurance program. These projects can test: (1) alternative methods of treating work activity of individuals entitled to 

disability benefits; (2) the alteration of other limitations and conditions that apply to such individuals (such as an increase in the 

length of the trial work period); and, (3) implementation of sliding 

44

scale benefit offsets. To conduct the projects, the Commissioner 

may waive compliance with the benefit requirements of Title II and 

Section 1148, and the HHS Secretary may waive the benefit requirements of Title XVIII. The Commissioner’s authority to conduct 

demonstration projects terminates on December 17, 2004, five 

years after its enactment in the ‘‘Ticket to Work and Work Incentives Improvement Act of 1999’’ (P.L. 106–170, ‘‘Ticket to Work 

Act’’). 

REASON FOR CHANGE

The current five-year limitation on waiver authority restricts the 

options that may be tested to improve work incentives and return 

to work initiatives, as several potential options the Commissioner 

may test would extend past the current five-year limit. Developing 

a well-designed demonstration project can require several years, 

and the current five-year authority might not allow sufficient time 

to both design the project and to conduct it long enough to obtain 

reliable data. 

EXPLANATION OF PROVISION

The new provision clarifies that the Commissioner is authorized 

to conduct demonstration projects that extend beyond December 17, 

2004, if such projects are initiated on or before that date (i.e., initiated within the five-year window after enactment of the Ticket to 

Work Act). 

EFFECTIVE DATE

Upon enactment. 

B. EXPANSION OF WAIVER AUTHORITY AVAILABLE IN CONNECTION

WITH DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN

DISABILITY INSURANCE BENEFITS BASED ON EARNINGS

(Sec. 402 of the Bill) 

PRESENT LAW

Section 234 of the Social Security Act provides the Commissioner 

with general authority to conduct demonstration projects for the 

disability insurance program. In addition, Section 302 of the Ticket 

to Work Act directs the Commissioner to conduct demonstration 

projects for the purpose of evaluating a program for Title II disability beneficiaries under which benefits are reduced by $1 for 

each $2 of the beneficiary’s earnings above a level determined by 

the Commissioner. To permit a thorough evaluation of alternative 

methods, Section 302 of the Ticket to Work Act allows the Commissioner to waive compliance with the benefit provisions of Title II 

and allows the Secretary of Health and Human Services to waive 

compliance with the benefit requirements of Title XVIII. 

REASON FOR CHANGE

This additional waiver authority is needed to allow the Commissioner to effectively test the $1-for-$2 benefit offset in combination 

with return to work services under the Ticket to Work program. 

Under the $1-for-$2 benefit offset, earnings of many beneficiaries 

may not be sufficient to completely eliminate benefits. However, 

45

under Section 1148 of the Social Security Act, benefits must be 

completely eliminated before employment networks participating in 

the Ticket to Work program are eligible to receive outcome payments. Therefore, employment networks are likely to be reluctant 

to accept tickets from beneficiaries participating in the $1 for $2 

benefit offset demonstration, making it impossible for the SSA to 

effectively test the combination of the benefit offset and these return to work services. Additionally, Section 1148 waiver authority 

was provided for the broad Title II disability demonstration authority under Section 234 of the Social Security Act, but not for this 

mandated project. 

EXPLANATION OF PROVISION

The new provision allows the Commissioner to also waive requirements in Section 1148 of the Social Security Act, which governs the Ticket to Work and Self-Sufficiency Program (Ticket to 

Work program), as they relate to Title II. 

EFFECTIVE DATE

Upon enactment. 

C. FUNDING OF DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS IN DISABILITY INSURANCE BENEFITS BASED ON EARNINGS

(Sec. 403 of the Bill) 

PRESENT LAW

The Ticket to Work Act provides that the benefits and administrative expenses of conducting the $1-for-$2 demonstration projects 

will be paid out of the Old-Age, Survivors, and Disability Insurance 

(OASDI) and Federal Hospital Insurance and Federal Supplementary Medical Insurance (HI/SMI) Trust Funds, to the extent 

provided in advance in appropriations acts. 

REASON FOR CHANGE

For demonstration projects conducted under the broader Title II 

demonstration project authority under Section 234 of the Social Security Act, administrative costs are paid out of otherwise available 

annually appropriated funds, and benefits associated with the demonstration projects are paid from the OASDI or HI/SMI Trust 

Funds. This provision would make funding sources for the $1-for-

$2 demonstration project under the Ticket to Work Act consistent 

with funding sources for other Title II demonstration projects. 

EXPLANATION OF PROVISION

The new provision establishes that administrative expenses for 

the $1-for-$2 demonstration project will be paid out of otherwise 

available annually-appropriated funds, and that benefits associated 

with the demonstration project will be paid from the OASDI or HI/

SMI Trust Funds. 

EFFECTIVE DATE

Upon enactment. 

46

D. AVAILABILITY OF FEDERAL AND STATE WORK INCENTIVE

SERVICES TO ADDITIONAL INDIVIDUALS

(Sec. 404 of the Bill) 

PRESENT LAW

Section 1149 of the Social Security Act (the act), as added by the 

Ticket to Work Act, directs the SSA to establish a communitybased work incentives planning and assistance programs to provide 

benefits planning and assistance to disabled beneficiaries. To establish this program, the SSA is required to award cooperative agreements (or grants or contracts) to State or private entities. In fulfillment of this requirement, the SSA has established the Benefits 

Planning, Assistance, and Outreach (BPAO) Program. BPAO 

projects now exist in every State.

Section 1150 of the act authorizes the SSA to award grants to 

State protection and advocacy (P&A) systems so that they can provide protection and advocacy services to disabled beneficiaries. 

Under this section, services provided by participating P&A systems 

may include: (1) information and advice about obtaining vocational 

rehabilitation (VR) and employment services; and (2) advocacy or 

other services that a disabled beneficiary may need to secure or regain employment. The SSA has established the Protection and Advocacy to Beneficiaries of Social Security (PABSS) Program pursuant to this authorization. 

To be eligible for services under either the BPAO or PABSS programs, an individual must be a ‘‘disabled beneficiary’’ as defined 

under Section 1148(k) of the act. Section 1148(k) defines a disabled 

beneficiary as an individual entitled to Title II benefits based on 

disability or an individual who is eligible for Federal SSI cash benefits under Title XVI based on disability or blindness. 

REASON FOR CHANGE

The Committee on Ways and Means recognizes that Social Security and SSI beneficiaries with disabilities face a variety of barriers 

and disincentives to becoming employed and staying in their jobs. 

The intent of this provision, as with the Ticket to Work Act, is to 

encourage disabled individuals to work. 

The definition of ‘‘disabled beneficiary’’ under section 1148(k) of 

the act does not include several groups of beneficiaries, including 

individuals who are no longer eligible for SSI benefits because of 

an earnings increase but remain eligible for Medicaid under section 

1619(b); individuals receiving only a State supplementation payment; and individuals who are in an extended period of Medicare 

eligibility. The Committee on Ways and Means believes that BPAO 

and PABSS services should be available to all of these disabled 

beneficiaries regardless of Title II or SSI payment status. Beneficiaries may have progressed beyond eligibility for Federal cash 

benefits, but may still need information about the effects of work 

on their benefits, or may need advocacy or other services to help 

them maintain or regain employment. Extending eligibility for the 

BPAO and PABSS programs to beneficiaries who are receiving a 

State supplementation payment or are still eligible for Medicare or 

Medicaid, but who are no longer eligible for Federal cash benefits, 

will help to prevent these beneficiaries from returning to the FedVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00046 Fmt 6659 Sfmt 6602 E:\HR\OC\HR046.XXX HR046
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eral cash benefit rolls and help them to reach their optimum level 

of employment. 

The Committee on Ways and Means also intends that PABSS 

services be available to provide assistance to beneficiaries who 

have successfully obtained employment but who continue to encounter job-related difficulties. Therefore, the new provision extends the current PABSS assistance (which is available for securing and regaining employment) to maintaining employment—thus 

providing a continuity of services for disabled individuals throughout the process of initially securing employment, the course of their 

being employed and, if needed, their efforts to regain employment. 

This provision would ensure that disabled individuals would not 

face a situation in which they would have to wait until they lost 

their employment in order to once again be eligible to receive 

PABSS services. Payments for services to maintain employment 

would be subject to Section 1150(c) of the Social Security Act. The 

Committee on Ways and Means will continue to monitor the implementation of PABSS programs to ensure that assistance is directed 

to all areas in which beneficiaries face obstacles in securing, maintaining, or regaining work. 

EXPLANATION OF PROVISION

The new provision expands eligibility for the BPAO and PABSS 

programs under Sections 1149 and 1150 of the act to include not 

just individuals who are ‘‘disabled beneficiaries’’ under Section 

1148(k) of the act, but also individuals who (1) are no longer eligible for SSI benefits because of an increase in earnings, but remain 

eligible for Medicaid under Section 1619(b); (2) receive only a State 

supplementation payment (a payment that some States provide as 

a supplement to the Federal SSI benefit); or (3) are in an extended 

period of Medicare eligibility under Title XVIII after a period of 

Title II disability has ended. The new provision also expands the 

types of services a P&A system may provide under Section 1150 of 

the act. Currently P&A systems may provide ‘‘advocacy or other 

services that a disabled beneficiary may need to secure or regain 

employment,’’ while the new provision allows them to provide ‘‘advocacy or other services that a disabled beneficiary may need to secure, maintain, or regain employment.’’

EFFECTIVE DATE

The amendment to Section 1149, which affects the BPAO Program, is effective with respect to grants, cooperative agreements or 

contracts entered into on or after the date of enactment. The 

amendments to Section 1150, which affect the PABSS Program, are 

effective for payments provided after the date of the enactment. 

E. TECHNICAL AMENDMENT CLARIFYING TREATMENT FOR CERTAIN

PURPOSES OF INDIVIDUAL WORK PLANS UNDER THE TICKET TO

WORK AND SELF-SUFFICIENCY PROGRAM

(Sec. 405 of the Bill) 

PRESENT LAW

Under Section 51 of the Internal Revenue Code (IRC), employers 

may claim a Work Opportunity Tax Credit (WOTC) if they hire, 

48

among other individuals, individuals with disabilities who have 

been referred by a State vocational rehabilitation (VR) agency. For 

an individual to qualify as a vocational rehabilitation referral 

under Section 51(d)(6)(B) of the IRC, the individual must be receiving or have completed vocational rehabilitation services pursuant 

to: (i) ‘‘an individualized written plan for employment under a 

State plan for vocational rehabilitation services approved under the 

Rehabilitation Act of 1973’’; or (ii) ‘‘a program of vocational rehabilitation carried out under chapter 31 of title 38, United States 

Code.’’ (IRC, Section 51(d)(6)(B)). 

The WOTC is equal to 40 percent of the first $6,000 of wages 

paid to newly hired employees during their first year of employment when the employee is retained for at least 400 work hours. 

As such, the maximum credit per employee is $2,400, but the credit 

may be less depending on the employer’s tax bracket. A lesser credit rate of 25 percent is provided to employers when the employee 

remains on the job for 120–399 hours. The amount of the credit reduces the company’s deduction for the employee’s wages. 

The Ticket to Work Act established the Ticket to Work and SelfSufficiency Program (Ticket to Work program) under Section 1148 

of the Social Security Act. Under this program, the SSA provides 

a ‘‘ticket’’ to eligible Social Security Disability Insurance beneficiaries and Supplemental Security Income beneficiaries with disabilities that allows them to obtain employment and other support 

services from an approved ‘‘employment network’’ of their choice. 

Employment networks may include State, local, or private entities 

that can provide directly, or arrange for other organizations or entities to provide, employment services, VR services, or other support 

services. State VR agencies have the option of participating in the 

Ticket to Work program as employment networks. Employment 

networks must work with each beneficiary they serve to develop an 

individual work plan (IWP) for that beneficiary that outlines his or 

her vocational goals and the services needed to achieve those goals. 

For VR agencies that participate in the Ticket to Work program, 

the individualized written plan for employment (as specified under 

(i) in paragraph one above) serves in lieu of the IWP. 

Under current law, an employer hiring a disabled individual referred by an employment network does not qualify for the WOTC 

unless the employment network is a State VR agency. 

REASON FOR CHANGE

The Ticket to Work program was designed to increase choice 

available to beneficiaries when they select providers of employment 

services. Employers hiring individuals with disabilities should be 

able to qualify for the WOTC regardless of whether the employment referral is made by a public or private service provider. This 

amendment updates eligibility criteria for the WOTC to conform to 

the expansion of employment services and the increase in number 

and range of VR providers as a result of the enactment of the Ticket to Work Act. 

EXPLANATION OF PROVISION

The new provision allows employers who hire disabled workers 

through referrals by employment networks under Section 1148 of 

the Social Security Act to qualify for the WOTC. Specifically, it proVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00048 Fmt 6659 Sfmt 6602 E:\HR\OC\HR046.XXX HR046
49

vides that, for purposes of Section 51(d)(6)(B)(i) of the IRC of 1986, 

an IWP under Section 1148 of the Social Security Act shall be 

treated as an individualized written plan for employment under a 

State plan for vocational rehabilitation services approved under the 

Rehabilitation Act of 1973. 

EFFECTIVE DATE

Effective as if it were included in Section 505 of the Ticket to 

Work Act. 

Subtitle B. Miscellaneous Amendments 

F. ELIMINATION OF TRANSCRIPT REQUIREMENT IN REMAND CASES

FULLY FAVORABLE TO THE CLAIMANT

(Sec. 411 of the Bill) 

PRESENT LAW

The Social Security Act requires the SSA to file a hearing transcript with the District Court for any SSA hearing that follows a 

court remand of a SSA decision. 

REASON FOR CHANGE

A claimant whose benefits have been denied is provided a transcript of a hearing to be used when the claimant appeals his case 

in Federal District court. If the Administrative Law Judge issues 

a fully favorable decision, then transcribing the hearing is unnecessary since the claimant would not appeal this decision. 

EXPLANATION OF PROVISION

The new provision clarifies that the SSA is not required to file 

a transcript with the court when the SSA, on remand, issues a decision fully favorable to the claimant. 

EFFECTIVE DATE

Effective with respect to final determinations issued (upon remand) on or after the date of enactment. 

G. NONPAYMENT OF BENEFITS UPON REMOVAL FROM THE UNITED

STATES

(Sec. 412 of the Bill) 

PRESENT LAW

In most cases, the Social Security Act prohibits the payment of 

Social Security benefits to non-citizens who are deported from the 

United States. However, the act does not prohibit the payment of 

Social Security benefits to non-citizens who are deported for smuggling other non-citizens into the United States. 

REASON FOR CHANGE

Individuals who are removed from the United States for smuggling aliens have committed an act that should prohibit them from 

receiving Social Security benefits.

50

EXPLANATION OF PROVISION

The new provision requires the SSA to suspend benefits of beneficiaries who are removed from the United States for smuggling 

aliens. 

EFFECTIVE DATE

Applies with respect to removals occurring after the date of enactment. 

H. REINSTATEMENT OF CERTAIN REPORTING REQUIREMENTS

(Sec. 413 of the Bill) 

PRESENT LAW

The Federal Reports Elimination and Sunset Act of 1995 

‘‘sunsetted’’ most annual or periodic reports from agencies to Congress that were listed in a 1993 House inventory of congressional 

reports. 

REASON FOR CHANGE

The reports to be reinstated provide Congress with important information needed to evaluate and oversee the Social Security and 

Medicare programs. 

EXPLANATION OF PROVISION

The new provision reinstates the requirements for several periodic reports to Congress that were subject to the 1995 ‘‘sunset’’ act, 

including annual reports on the financial solvency of the Social Security and Medicare programs (the Board of Trustees’ reports on 

the OASDI, HI, and SMI Trust Funds) and annual reports on certain aspects of the administration of the Title II disability program 

(the SSA Commissioner’s reports on pre-effectuation reviews of disability determinations and continuing disability reviews). 

EFFECTIVE DATE

Upon enactment. 

I. CLARIFICATION OF DEFINITIONS REGARDING CERTAIN SURVIVOR

BENEFITS

(Sec. 414 of the Bill) 

PRESENT LAW

Under the definitions of ‘‘widow’’ and ‘‘widower’’ in Section 216 

of the Social Security Act, a widow or widower must have been 

married to the deceased spouse for at least nine months before his 

or her death in order to be eligible for survivor benefits. 

REASON FOR CHANGE

This provision allows the Commissioner to issue benefits in certain unusual cases in which the duration of marriage requirement 

could not be met due to a legal impediment over which the individual had no control and the individual would have met the legal 

requirements were it not for the legal impediment. 

51

EXPLANATION OF PROVISION

The new provision creates an exception to the nine-month requirement for cases in which the Commissioner finds that the 

claimant and the deceased spouse would have been married for 

longer than nine months but for the fact that the deceased spouse 

was legally prohibited from divorcing a prior spouse who was institutionalized due to mental incompetence or similar incapacity. 

EFFECTIVE DATE

Effective for benefit applications filed after the date of enactment. 

J. CLARIFICATION RESPECTING THE FICA AND SECA TAX EXEMPTIONS FOR AN INDIVIDUAL WHOSE EARNINGS ARE SUBJECT TO THE

LAWS OF A TOTALIZATION AGREEMENT PARTNER

(Sec. 415 of the Bill) 

PRESENT LAW

In cases where there is an agreement with a foreign country (i.e., 

a totalization agreement), a worker’s earnings are exempt from 

United States Social Security payroll taxes when those earnings 

are subject to the foreign country’s retirement system. 

REASON FOR CHANGE

In U.S. totalization agreements, a person’s work is generally subject to the Social Security laws of the country in which the work 

is performed. In most cases, the worker (whether subject to the 

laws of the United States or the other country) is compulsorily covered and required to pay contributions in accordance with the laws 

of that country. In some instances, however, work that would be 

compulsorily covered in the U.S. is excluded from compulsory coverage in the other country (such as Germany). In such cases, the 

IRS has questioned the exemption from U.S. Social Security tax for 

workers who elect not to make contributions to the foreign country’s retirement system. This provision would remove any question 

regarding the exemption and would be consistent with the general 

philosophy behind the coverage rules of totalization agreements. 

EXPLANATION OF PROVISION

The new provision clarifies the legal authority to exempt a worker’s earnings from United States Social Security tax in cases where 

the earnings were subject to a foreign country’s retirement system 

in accordance with a U.S. totalization agreement, but the foreign 

country’s law does not require compulsory contributions on those 

earnings. The provision establishes that such earnings are exempt 

from United States Social Security tax whether or not the worker 

elected to make contributions to the foreign country’s retirement 

system. 

EFFECTIVE DATE

Upon enactment. 

52

K. COVERAGE UNDER DIVIDED RETIREMENT SYSTEM FOR PUBLIC

EMPLOYEES IN KENTUCKY

(Sec. 416 of the Bill) 

PRESENT LAW

Under Section 218 of the Social Security Act, a State may choose 

whether or not its State and local government employees who are 

covered by a public pension plan may also participate in the Social 

Security Old-Age, Survivors, and Disability Insurance program. (In 

this context, the term ‘‘public pension plan’’ refers to a pension, annuity, retirement, or similar fund or system established by a State 

or a political subdivision of a State such as a town. Under current 

law, State or local government employees not covered by a public 

pension plan are, with a few exceptions, required to pay Social Security payroll taxes.) 

Social Security coverage for employees covered under a State or 

local government public pension plan is established through an 

agreement between the State and the Federal government. All 

States have the option of electing Social Security coverage for employees by a majority vote in a referendum. If the majority vote is 

in favor of Social Security coverage, then the entire group, including those voting against such coverage, will be covered by Social 

Security. If the majority vote is against Social Security coverage, 

then the entire group, including those voting in favor of such coverage and employees hired after the referendum, will not be covered by Social Security. 

In certain States, however, there is an alternative method for 

electing Social Security coverage. Under this method, rather than 

the majority of votes determining Social Security coverage for the 

whole group, employees voting in the referendum may individually 

determine whether they want Social Security coverage, provided 

that all newly hired employees of the system are required to participate in Social Security. After the referendum, the retirement 

system is divided into two groups, one composed of members who 

elected Social Security coverage plus those hired after the referendum, and the other composed of those who did not elect Social 

Security coverage. Under Section 218(d)(6)(c) of the Social Security 

Act, 21 States currently have authority to operate such a divided 

retirement system. 

REASON FOR CHANGE

The governments of the City of Louisville and Jefferson County 

merged in January 2003, and formed a new political subdivision. 

Under the provision, once the new political subdivision holds a referendum on Social Security coverage among its employees, each 

employee would choose whether or not to participate in the Social 

Security system in addition to their public pension plan. All employees newly hired to the system after the divided system is in 

place would be covered automatically under Social Security. 

Currently, some employees of the new government are covered 

under Social Security, while others are not. In order to provide fair 

and equitable coverage to all employees, a divided retirement system, such as that currently authorized in 21 other States, was seen 

as the best solution. It would allow those who want to keep Social 

53

Security coverage or obtain Social Security coverage to do so, without requiring other current employees to participate in Social Security as well. 

Without this provision, upon holding a referendum on Social Security coverage, a majority of votes would determine whether or 

not the group would participate in Social Security. Since the number of non-covered employees exceeds the number of Social Security-covered employees in the new government, those employees 

currently covered by Social Security could lose that coverage. The 

Kentucky General Assembly has adopted a bill that will allow the 

new divided retirement system to go forward following enactment 

of this provision. 

EXPLANATION OF PROVISION

The new provision permits the State of Kentucky to join the 21 

other States in being able to offer a divided retirement system. 

This system would permit current State and local government 

workers in a public pension plan to elect Social Security coverage 

on an individual basis. Those who do not wish to be covered by Social Security would continue to participate exclusively in the public 

pension plan. 

EFFECTIVE DATE

Effective retroactively to January 1, 2003. 

L. COMPENSATION FOR THE SOCIAL SECURITY ADVISORY BOARD

(Sec. 417 of the Bill) 

PRESENT LAW

The Social Security Advisory Board is an independent, bipartisan 

Board established by the Congress under Section 703 of the Social 

Security Act. The 7-member Board is appointed by the President 

and the Congress to advise the President, the Congress, and the 

Commissioner of Social Security on matters related to the Social 

Security and Supplemental Security Income programs. Section 

703(f) of the Social Security Act provides that members of the 

Board serve without compensation, except that, while engaged in 

Board business away from their homes or regular places of business, members may be allowed travel expenses, including per diem 

in lieu of subsistence, as authorized by Section 5703 of Title 5, 

United States Code for persons in the Government who are employed intermittently.

REASON FOR CHANGE

Other government advisory boards—such as the Employee Retirement Income Security Act Advisory Council, the Pension Benefit Guaranty Corporation Advisory Committee and the Thrift Savings Plan Board—provide compensation for their members. This 

provision allows for similar treatment of Social Security Advisory 

Board members with respect to compensation. 

EXPLANATION OF PROVISION

The new provision establishes that compensation for Social Security Advisory Board members will be provided, at the daily rate of 

54

basic pay for level IV of the Executive Schedule, for each day (including travel time) during which the member is engaged in performing a function of the Board. 

EFFECTIVE DATE

January 1, 2003. 

M. 60-MONTH PERIOD OF EMPLOYMENT REQUIREMENT FOR

APPLICATION OF GOVERNMENT PENSION OFFSET EXEMPTION

(Sec. 418 of the Bill) 

PRESENT LAW

The Government Pension Offset (GPO) was enacted in order to 

equalize treatment of workers in jobs not covered by Social Security and workers in jobs covered by Social Security, with respect to 

spouse and survivor benefits. Where what is known as the ‘‘dualentitlement’’ rule reduces a spouse or survivor benefit dollar-fordollar by the worker’s own Social Security retirement or disability 

benefit, the GPO reduces the Social Security spouse or survivor 

benefit by two-thirds of the government pension. 

However, under what’s known as the ‘‘last day rule,’’ State and 

local government workers are exempt from the GPO if, on the last 

day of employment, their job was covered by Social Security. In 

contrast, Federal workers who switched from the Civil Service Retirement System (CSRS), a system that is not covered by Social Security, to the Federal Employee Retirement System (FERS), a system that is covered by Social Security, must work for 5 years under 

FERS in order to be exempt from the GPO. 

REASON FOR CHANGE

In August 2002, the GAO published a report titled ‘‘Social Security Administration: Revision to the Government Pension Offset 

Exemption Should Be Considered’’ (GAO–02–950). At the request of 

Committee on Ways and Means, Subcommittee on Social Security 

Chairman E. Clay Shaw, Jr., the GAO investigated use of the ‘‘last 

day’’ exemption to avoid being subject to the GPO. The investigation found that over 4,800 individuals in Texas and Georgia used 

or planned to use the last day exemption, with over 3,500 in Texas 

using it in 2002. 

In testimony provided to the Subcommittee on Social Security 

February 27, 2003, the GAO stated that the exemption ‘‘allows a 

select group of individuals with a relatively small investment of 

work time and only minimal Social Security contributions to gain 

access to potentially many years of full Social Security spousal benefits.’’ The GAO also clarified in testimony that a spouse who 

worked in the private sector, paid payroll taxes for an entire career, and earned a Social Security retirement or disability benefit 

as a worker would not receive a full spousal benefit. The GAO stated that current usage of last day exemption could cost the Social 

Security trust funds $450 million, and that considering the potential for abuse of the exemption and the likelihood of increased use, 

timely action is needed. This provision to conform their treatment 

to that of Federal workers was among the recommendations provided by the GAO to address potential abuse of the exemption. A 

55

provision addressing the GPO last-day exemption was also included 

in President Bush’s budget request for 2004. 

EXPLANATION OF PROVISION

The new provision requires that State and local government 

workers be covered by Social Security during their last 5 years of 

employment in order to be exempt from the GPO. 

EFFECTIVE DATE

Effective for applications filed on or after the first day of the first 

month after the date of enactment. However, the provision would 

not apply to individuals whose last day of employment for the State 

or local governmental entity occurred before the end of the 90-day 

period following the date of enactment. It would also not apply to 

persons whose last day of employment occurred after the end of the 

90-day period following the date of enactment, if during the 90-day 

period following the date of enactment the person’s job was covered 

by Social Security and remained so until their last day of employment. 

Subtitle C. Technical Amendments 

N. TECHNICAL CORRECTION RELATING TO RESPONSIBLE AGENCY

HEAD

(Sec. 421 of the Bill) 

PRESENT LAW

Section 1143 of the Social Security Act directs ‘‘the Secretary of 

Health and Human Services’’ to send periodic Social Security Statements to individuals. 

REASON FOR CHANGE

The ‘‘Social Security Independence and Program Improvements 

Act of 1994’’ (P.L. 103–296) made the Social Security Administration an independent agency separate from the Department of 

Health and Human Services. This provision updates Section 1143 

to reflect that change.

EXPLANATION OF PROVISION

The new provision makes a technical correction to this section by 

inserting a reference to the Commissioner of Social Security in 

place of the reference to the Secretary of Health and Human Services. 

EFFECTIVE DATE

Upon enactment. 

56

O. TECHNICAL CORRECTION RELATING TO RETIREMENT BENEFITS OF

MINISTERS

(Sec. 422 of the Bill) 

PRESENT LAW

Section 1456 of the ‘‘Small Business Job Protection Act of 1996’’ (P.L. 104–188) established that certain retirement benefits received 

by ministers and members of religious orders (such as the rental 

value of a parsonage or parsonage allowance) are not subject to Social Security payroll taxes under the Internal Revenue Code. However, under Section 211 of the Social Security Act, these retirement 

benefits are treated as net earnings from self-employment for the 

purpose of acquiring insured status and calculating Social Security 

benefit amounts. 

REASON FOR CHANGE

P.L. 104–188 provided that certain retirement benefits received 

by ministers and members of religious orders are not subject to 

payroll taxes. However, a conforming change was not made to the 

Social Security Act to exclude these benefits from being counted as 

wages for the purpose of acquiring insured status and calculating 

Social Security benefit amounts. This income is therefore not treated in a uniform manner. This provision would conform the Social 

Security Act to the Internal Revenue Code with respect to such income. 

EXPLANATION OF PROVISION

The new provision makes a conforming change to exclude these 

benefits received by retired clergy from Social Security-covered 

earnings for the purpose of acquiring insured status and calculating Social Security benefit amounts. 

EFFECTIVE DATE

Effective for years beginning before, on, or after December 31, 

1994 (same as the effective date of Section 1456 of P.L. 104–188). 

P. TECHNICAL CORRECTION RELATING TO DOMESTIC EMPLOYMENT

(Sec. 423 of the Bill) 

PRESENT LAW

Current law is ambiguous concerning the Social Security coverage and tax treatment of domestic service performed on a farm. 

Domestic employment on a farm appears to be subject to two separate coverage thresholds (one for agricultural labor and another for 

domestic employees). 

REASON FOR CHANGE

Prior to 1994, domestic service on a farm was treated as agricultural labor and was subject to the coverage threshold for agricultural labor. According to the SSA, in 1994, when Congress amended the law with respect to domestic employment, the intent was 

that domestic employment on a farm would be subject to the coverage threshold for domestic employees instead of the threshold for 

57

agricultural labor. However, the current language is unclear, making it appear as if farm domestics are subject to both thresholds. 

EXPLANATION OF PROVISION

The new provision clarifies that domestic service on a farm is 

treated as domestic employment, rather than agricultural labor, for 

Social Security coverage and tax purposes. 

EFFECTIVE DATE

Upon enactment. 

Q. TECHNICAL CORRECTION OF OUTDATED REFERENCES

(Sec. 424 of the Bill) 

PRESENT LAW

Section 202(n) and 211(a)(15) of the Social Security Act and Section 3102(a) of the Internal Revenue Code of 1986 each contain outdated references that relate to the Social Security program. 

REASON FOR CHANGE

Over the years, provisions in the Social Security Act, the Internal 

Revenue Code and other related laws have been deleted, redesignated or amended. However, necessary conforming changes have 

not always been made. Consequently, Social Security law contains 

some outdated references.

EXPLANATION OF PROVISION

The new provision corrects outdated references in the Social Security Act and the Internal Revenue Code by: (1) in Section 202(n) 

of the Social Security Act, updating references respecting removal 

from the United States; (2) in Section 211(a)(15) of the Social Security Act, correcting a citation respecting a tax deduction related to 

health insurance costs of self-employed individuals; and (3) in Section 3102(a) of the Internal Revenue Code of 1986, eliminating a 

reference to an obsolete 20 day agricultural work test. 

EFFECTIVE DATE

Upon enactment. 

R. TECHNICAL CORRECTION RESPECTING SELF-EMPLOYMENT INCOME

IN COMMUNITY PROPERTY STATES

(Sec. 425 of the Bill) 

PRESENT LAW

The Social Security Act and the Internal Revenue Code provide 

that, in the absence of a partnership, all self-employment income 

from a trade or business operated by a married person in a community property State is deemed to be the husband’s unless the wife 

exercises substantially all of the management and control of the 

trade or business. 

58

REASON FOR CHANGE

Present law was found to be unconstitutional in several court 

cases in 1980. Since then, income from a trade or business that is 

not a partnership in a community property State has been treated 

the same as income from a trade or business that is not a partnership in a non-community property State—it is taxed and credited 

to the spouse who is found to be carrying on the business. 

This change will conform the provisions in the Social Security 

Act and the Internal Revenue Code to current practice in both community property and non-community property States. 

EXPLANATION OF PROVISION

Under the new provision, self-employment income from a trade 

or business that is not a partnership, and that is operated by a 

married person in a community property State, is taxed and credited to the spouse who is carrying on the trade or business. If the 

trade or business is jointly operated, the self-employment income 

is taxed and credited to each spouse based on his or her distributive share of gross earnings. 

EFFECTIVE DATE

Upon enactment. 

III. VOTES OF THE COMMITTEE 

In compliance with clause 3(b) of rule XIII of the Rules of the 

House of Representatives, the following statements are made concerning the votes of the Committee on Ways and Means in its consideration of the bill, H.R. 743. 

MOTION TO REPORT THE BILL

The bill, H.R. 743, as amended, was ordered favorably reported 

by a rollcall vote of 35 yeas to 2 nays (with a quorum being 

present). The vote was as follows:

Representatives Yea Nay Present Representative Yea Nay Present 

Mr. Thomas ........................... X ........... ............. Mr. Rangel ........................... X ........... .............

Mr. Crane .............................. X ........... ............. Mr. Stark .............................. X ........... .............

Mr. Shaw ............................... X ........... ............. Mr. Matsui ............................ X ........... .............

Mrs. Johnson ......................... X ........... ............. Mr. Levin .............................. X ........... .............

Mr. Houghton ........................ X ........... ............. Mr. Cardin ............................ X ........... .............

Mr. Herger ............................. X ........... ............. Mr. McDermott ..................... X ........... .............

Mr. McCrery ........................... X ........... ............. Mr. Kleczka ........................... X ........... .............

Mr. Camp .............................. X ........... ............. Mr. Lewis (GA) ..................... X ........... .............

Mr. Ramstad ......................... X ........... ............. Mr. Neal ............................... ........... ........... .............

Mr. Nussle ............................. ........... ........... ............. Mr. McNulty .......................... ........... ........... .............

Mr. Johnson ........................... X ........... ............. Mr. Jefferson ........................ X ........... .............

Ms. Dunn .............................. X ........... ............. Mr. Tanner ............................ X ........... .............

Mr. Collins ............................ X ........... ............. Mr. Becerra .......................... X ........... .............

Mr. Portman .......................... X ........... ............. Mr. Doggett .......................... ........... X .............

Mr. English ........................... X ........... ............. Mr. Pomeroy ......................... X ........... .............

Mr. Hayworth ......................... X ........... ............. Mr. Sandlin .......................... ........... X .............

Mr. Weller .............................. X ........... ............. Ms. Tubbs Jones .................. X ........... .............

Mr. Hulshof ........................... X ........... .............

Mr. McInnis ........................... X ........... .............

Mr. Lewis (KY) ...................... X ........... .............

Mr. Foley ............................... ........... ........... .............

Mr. Brady .............................. X ........... .............

Mr. Ryan ............................... X ........... .............

59

Representatives Yea Nay Present Representative Yea Nay Present 

Mr. Cantor ............................. X ........... .............

VOTES ON AMENDMENTS

A rollcall vote was conducted on the following amendments to the 

Chairman’s amendment in the nature of a substitute. 

An amendment by Mr. Jefferson, which would modify the Government Pension Offset from two-thirds of the government pension 

to two-thirds of the amount of the combined government and Social 

Security benefit exceeding $2,000 per month (not to exceed the reduction under current law), was defeated by a rollcall vote of 14 

yeas to 21 nays. The vote was as follows:

Representatives Yea Nay Present Representative Yea Nay Present 

Mr. Thomas ........................... ........... X ............. Mr. Rangel ........................... X ........... .............

Mr. Crane .............................. ........... X ............. Mr. Stark .............................. X ........... .............

Mr. Shaw ............................... ........... X ............. Mr. Matsui ............................ X ........... .............

Mrs. Johnson ......................... ........... X ............. Mr. Levin .............................. X ........... .............

Mr. Houghton ........................ ........... X ............. Mr. Cardin ............................ X ........... .............

Mr. Herger ............................. ........... X ............. Mr. McDermott ..................... X ........... .............

Mr. McCrery ........................... ........... X ............. Mr. Kleczka ........................... X ........... .............

Mr. Camp .............................. ........... X ............. Mr. Lewis (GA) ..................... X ........... .............

Mr. Ramstad ......................... ........... X ............. Mr. Neal ............................... ........... ........... .............

Mr. Nussle ............................. ........... ........... ............. Mr. McNulty .......................... ........... ........... .............

Mr. Johnson ........................... ........... X ............. Mr. Jefferson ........................ X ........... .............

Ms. Dunn .............................. ........... ........... ............. Mr. Tanner ............................ X ........... .............

Mr. Collins ............................ ........... X ............. Mr. Becerra .......................... X ........... .............

Mr. Portman .......................... ........... X ............. Mr. Doggett .......................... X ........... .............

Mr. English ........................... ........... X ............. Mr. Pomeroy ......................... X ........... .............

Mr. Hayworth ......................... ........... X ............. Mr. Sandlin .......................... ........... ........... .............

Mr. Weller .............................. ........... X ............. Ms. Tubbs Jones .................. X ........... .............

Mr. Hulshof ........................... ........... X .............

Mr. McInnis ........................... ........... X .............

Mr. Lewis (KY) ...................... ........... X .............

Mr. Foley ............................... ........... ........... .............

Mr. Brady .............................. ........... X .............

Mr. Ryan ............................... ........... X .............

Mr. Cantor ............................. ........... X .............

An amendment by Mr. Stark, which would reduce the Government Pension Offset of Social Security spousal and survivor’s benefits from two-thirds to one-third of the government pension, was 

defeated by a roll call vote of 15 yeas to 22 nays. The vote was as 

follows:

Representatives Yea Nay Present Representative Yea Nay Present 

Mr. Thomas ........................... ........... X ............. Mr. Rangel ........................... X ........... .............

Mr. Crane .............................. ........... X ............. Mr. Stark .............................. X ........... .............

Mr. Shaw ............................... ........... X ............. Mr. Matsui ............................ X ........... .............

Mrs. Johnson ......................... ........... X ............. Mr. Levin .............................. X ........... .............

Mr. Houghton ........................ ........... X ............. Mr. Cardin ............................ X ........... .............

Mr. Herger ............................. ........... X ............. Mr. McDermott ..................... X ........... .............

Mr. McCrery ........................... ........... X ............. Mr. Kleczka ........................... X ........... .............

Mr. Camp .............................. ........... X ............. Mr. Lewis (GA) ..................... X ........... .............

Mr. Ramstad ......................... ........... X ............. Mr. Neal ............................... ........... ........... .............

Mr. Nussle ............................. ........... ........... ............. Mr. McNulty .......................... ........... ........... .............

Mr. Johnson ........................... ........... X ............. Mr. Jefferson ........................ X ........... .............

Ms. Dunn .............................. ........... X ............. Mr. Tanner ............................ X ........... .............

Mr. Collins ............................ ........... X ............. Mr. Becerra .......................... X ........... .............

Mr. Portman .......................... ........... X ............. Mr. Doggett .......................... X ........... .............

Mr. English ........................... ........... X ............. Mr. Pomeroy ......................... X ........... .............

Mr. Hayworth ......................... ........... X ............. Mr. Sandlin .......................... X ........... .............

60

Representatives Yea Nay Present Representative Yea Nay Present 

Mr. Weller .............................. ........... X ............. Ms. Tubbs Jones .................. X ........... .............

Mr. Hulshof ........................... ........... X .............

Mr. McInnis ........................... ........... X .............

Mr. Lewis (KY) ...................... ........... X .............

Mr. Foley ............................... ........... ........... .............

Mr. Brady .............................. ........... X .............

Mr. Ryan ............................... ........... X .............

Mr. Cantor ............................. ........... X .............

IV. BUDGET EFFECTS OF THE BILL 

A. COMMITTEE ESTIMATE OF BUDGETARY EFFECTS

In compliance with clause 3(d)(2) of rule XIII of the Rules of the 

House of Representatives, the following statement is made concerning the effects on the budget of the revenue provisions of the 

bill, H.R. 743 as reported: 

The Committee agrees with the estimate prepared by the Congressional Budget Office (CBO), which is included below. 

B. STATEMENT REGARDING NEW BUDGET AUTHORITY AND TAX

EXPENDITURES BUDGET AUTHORITY

In compliance with clause 3(c)(2) of rule XIII of the Rules of the 

House of Representatives, the Committee states the bill will reduce 

direct spending and increase revenues, resulting in $655 million in 

savings to the unified budget. 

C. COST ESTIMATE PREPARED BY THE CONGRESSIONAL BUDGET

OFFICE

In compliance with clause 3(c)(3) of rule XIII of the Rules of the 

House of Representatives requiring a cost estimate prepared by the 

Congressional Budget Office, the following report prepared by CBO 

is provided.

U.S. CONGRESS, 

CONGRESSIONAL BUDGET OFFICE, 

Washington, DC, March 20, 2003. 

Hon. WILLIAM ‘‘BILL’’ M. THOMAS, 

Chairman, Committee on Ways and Means, 

House of Representatives, Washington, DC. 

DEAR MR. CHAIRMAN: The Congressional Budget Office has prepared the enclosed cost estimate for H.R. 743, the Social Security 

Protection Act of 2003. 

If you wish further details on this estimate, we will be pleased 

to provide them. The CBO staff contact is Kathy Ruffing. 

Sincerely, 

DOUGLAS HOLTZ-EAKIN, 

Director. 

Enclosure. 

H.R. 743—Social Security Protection Act of 2003

Summary: H.R. 743 would strengthen oversight of representative 

payees (people who handle benefit checks for others, such as children or mentally impaired adults), bar Social Security benefits to 

61

fugitives, revamp the Social Security Administration’s (SSA’s) procedures for paying attorneys who represent successful claimants, 

and tighten the rules for some state and local retirees who switch 

jobs briefly in order to boost their Social Security benefits. In all, 

the bill contains three dozen provisions, although many would have 

little or no budgetary effect. 

On balance, enacting H.R. 743 would lead to small net costs in 

2004 but net savings thereafter—by amounts that grow from $16 

million in 2005 to $147 million in 2013. In total, CBO estimates 

that enacting the bill would trim direct spending and boost revenue 

by a combined $655 million over the 2004–2013 period. About twothirds of those effects are in Social Security, which is off-budget. 

H.R. 743 would also affect discretionary spending. CBO estimates that implementing the bill would cost SSA $15 million to 

$20 million a year through 2010, and smaller amounts after that, 

for extra enforcement and processing activities. 

Section 4 of the Unfunded Mandates Reform Act (UMRA) excludes from the requirements of that act any provision that relates 

to the Old-Age, Survivors, and Disability Insurance program 

(OASDI) under title II of the Social Security Act. Many provisions 

of H.R. 743 would fall within that exclusion. The other provisions 

of the bill contain no intergovernmental mandates as defined in 

UMRA and would impose no costs on state, local, or tribal governments. They do contain private-sector mandates as defined in 

UMRA. CBO estimates that the costs to the private sector of those 

mandates would not exceed the threshold established by UMRA 

($117 million in 2003, adjusted annually for inflation).

Estimated cost to the Federal Government: The estimated budgetary impact of H.R. 743 shown in the following table. The costs 

of this legislation fall within budget functions 570 (Medicare), 600 

(income security), and 650 (Social Security).

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

CHANGES IN DIRECT SPENDING (OUTLAYS)

Title I. Protection of 

beneficiaries: 

Authority to reissue benefits 

misused by 

organizational 

representative 

payees: 

OASDI 

benefits 2 * * * * * * * * *

SSI benefits ...... 1 * * * * * * * * *

Title II. Program protections: 

Denial of benefits to fugitives: 

OASDI 

benefits ¥10 ¥30 ¥44 ¥55 ¥59 ¥61 ¥63 ¥66 ¥68 ¥70

Medicare .. ¥1 ¥4 ¥11 ¥15 ¥19 ¥22 ¥23 ¥25 ¥25 ¥27

62

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Title III. Attorney fee 

payment system 

improvements: 

Cap of $75 (indexed) on 

processing 

charges in 

title II: OASDI 

receipts ........ 12 24 25 27 28 29 31 32 33 34

Temporary extension of attorney-fee 

payment system to title 

XVI: SSI receipts ........... ¥1 ¥4 ¥4 ¥4 ¥4 ¥5 ¥5***

Title IV. Miscellaneous 

and technical 

amendments: * * * * * * * * * 1

60-month employment requirement for 

exemption 

from Government Pension 

Offset: OASDI 

benefits ........ * * ¥1 ¥2 ¥4 ¥8 ¥15 ¥26 ¥49 ¥80

Permission for 

Kentucky to 

operate divided retirement systems: OASDI 

benefits ........ * * * * * * * * * 1

Total changes in 

direct spending: 

On-budget * ¥8 ¥15 ¥19 ¥23 ¥26 ¥28 ¥25 ¥25 ¥27

Off-budget 

(OASDI) 4 ¥7 ¥20 ¥30 ¥35 ¥40 ¥48 ¥59 ¥83 ¥115

Total .... 4 ¥14 ¥35 ¥49 ¥58 ¥66 ¥75 ¥84 ¥109 ¥142

CHANGES IN REVENUES

Title IV. Miscellaneous 

and technical 

amendments: 

Permission for 

Kentucky to 

operate divided retirement systems: 

OASDI revenues .. 1 1 2 2 3 3 3 4 4 5

Other revenues .... * * * * * * * * * *

Clarification of 

eligibility for 

Work Opportunity Credit ¥2*00000000

Total changes in 

revenues: 

On-budget ¥2*00000000

63

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Off-budget 

(OASDI) 1 1 2 2 3 3 3 4 4 5

Total .... ¥1122333445

NET CHANGES IN DIRECT SPENDING AND REVENUES (EFFECT ON DEFICITS)

On-budget ................. 2 ¥8 ¥15 ¥19 ¥23 ¥26 ¥28 ¥25 ¥25 ¥27

Off-budget (OASDI) ... 4 ¥8 ¥21 ¥32 ¥38 ¥43 ¥51 ¥63 ¥88 ¥120

Total ............. 5 ¥16 ¥37 ¥52 ¥61 ¥69 ¥79 ¥88 ¥113 ¥147

CHANGES IN SPENDING SUBJECT TO APPROPRIATION (OUTLAYS)

OASDI administrative 

expenses ............... 4 3 2 2 2 2 2 3 3 4

SSI administrative expenses ................... 14 13 13 14 15 16 16 2 2 2

Total ............. 18 17 15 16 17 18 19 5 5 6

Notes.—Details may not add to totals because of rounding. 

OASDI = Old-Age, Survivors, and Disability Insurance (title II); SSI = Supplemental Security Income (title XVI). 

*= Less than $500,000. 

Basis of estimate: For this estimate, CBO assumes that H.R. 743 

will be enacted in September 2003. 

Direct spending and revenues 

Title I. Nearly seven million people—three million adults and 

four million children—who get Social Security, Supplemental Security Income (SSI), or both have their checks sent to a representative payee who helps manage the beneficiary’s finances. The payee 

must also report certain events, such as changes in the beneficiary’s income or school attendance, to SSA. In about 85 percent 

of cases, a family member serves as a representative payee. But an 

attorney or guardian, a social service agency, an institution, or 

other nonrelative may act as a payee, especially for a disabled 

adult. About 45,000 organizations serve as representative payees 

for about 750,000 clients. SSA monitors representative payees by 

requiring annual reports and by conducting on-site reviews every 

three years of certain payees who serve a large number of beneficiaries. 

H.R. 743 would direct SSA to certify annually that social service 

agencies meet licensing and bonding requirements and to conduct 

periodic on-site inspections of more representative payees. It would 

enhance SSA’s ability to recover misused funds and to impose civil 

monetary penalties. 

Most of the provisions would have negligible effects on benefit 

payments or recoveries. One section, however, would require SSA 

to pay beneficiaries any amounts that had been misused by an organizational representative payee. (Currently, such claimants must 

show negligence by SSA.) ‘‘Misuse’’ means converting funds to the 

payee’s own use or any purpose other than the use and benefit of 

the client. The provision would be retroactive to January 1, 1995. 

According to SSA, representative payees misuse about $3 million 

in benefits each year. Although SSA’s Inspector General (IG) has 

found weaknesses in internal controls of organizational payees, few 

of the resulting errors would constitute misuse. Because organizations handle about 12 percent of the dollars flowing through repVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00063 Fmt 6659 Sfmt 6602 E:\HR\OC\HR046.XXX HR046
64

resentative payees, CBO estimates that reimbursing nine years’ worth of misused benefits would cost $3 million in 2004. Extra 

costs in 2005 through 2013 would be negligible. 

Title II. H.R. 743 would forbid fugitive felons and people fleeing 

prosecution from collecting Social Security benefits. CBO estimates 

that this policy would reduce Social Security spending by $10 million in 2004 and $525 million over the 2004–2013 period. CBO also estimates that the policy would save $172 million in Medicare over 

the 10 years.

CBO used data from a report by SSA’s Inspector General to estimate those savings. The IG extrapolated from a sample of about 

400 cases in 10 states to estimate that fugitives received between 

$40 million and $180 million in Social Security benefits in 1999. 

The midpoint of that range ($110 million) reflected an estimated 

15,000 fugitives with an average benefit of almost $600 per month. 

Assuming that their number and average benefit keep pace with 

the overall program, CBO extrapolated that total to $130 million 

in 2004 and $175 million in 2013. 

CBO judges, however, that several obstacles would keep savings 

from reaching those figures. First, large-scale enforcement poses 

challenges—a fact highlighted by the IG’s work with a small sample. By tapping the National Crime Information Center (NCIC) and 

obtaining data directly from some states that do not report fully to 

the NCIC, SSA has access to more than half of fugitive warrants; 

some, though, lack key information (such as full name and Social 

Security number) for an accurate match. Illustrating that hurdle, 

an IG study of the SSI program—three years after fugitives became 

ineligible—found that about 20 percent of ineligible recipients were 

suspended from the rolls promptly, another 30 percent were suspended eventually, and 50 percent were apparently missed. That 

study covered years before 2000, when SSA began matching data 

with the NCIC; nevertheless, the findings lead CBO to assume that 

matching will ultimately be about 60 percent effective. 

Second, some people spotted by computer matching will probably 

clear their records when their benefits stop, resulting in little or no 

long-term savings. CBO found that many warrants are dated—

about 15 percent of state warrants, for example, are more than 10 

years old—and most are for nonviolent offenses such as drug possession and probation or parole violation. In such cases, ‘‘fugitives’’

with no subsequent convictions may face nothing worse than a suspended sentence or probation. Faced with a lifetime cutoff from Social Security, CBO assumes that some would run that risk. To account for such cases, CBO subtracted another one-third from potential savings, bringing the result to 40 percent of the IG’s figure. 

CBO assumes those savings are attainable about two years after 

enactment; initial savings are more modest, as SSA signs datasharing agreements with more states and writes regulations. 

CBO assumes that 80 percent of fugitives who would be affected 

by this provision are disabled beneficiaries who qualify for Medicare. If they lost their health benefits too, extra savings in 2013 

(when their average Medicare benefit—about $9,600—almost 

matches their assumed Social Security benefit, $9,900) could reach 

$54 million. However, they would not lose Medicare eligibility. 

Technically their Social Security benefit would be suspended, not 

terminated. A suspension does not erase Medicare eligibility. Some 

65

Medicare savings would probably occur simply because beneficiaries fail to realize they remain eligible, fear using their Medicare card, or stop paying the premium (which is usually withheld 

from Social Security checks) for Part B coverage. CBO assumes 

that the resulting drop in use of Medicare benefits would save 

about half as much as an outright ban, or about $27 million in 

2013.

Title III. Many Social Security claimants, especially disability applicants who win benefits on appeal, are represented by attorneys. 

A standard fee agreement between attorney and client pledges that 

the attorney will receive 25 percent of any past-due benefits up to 

a cap of $5,300. (By the time someone wins on appeal, past-due 

benefits typically amount to about 18 months’ worth.) That cap stood at $4,000 for more than a decade until SSA raised it in 2002. 

When SSA awards OASDI benefits in such cases, it pays the attorney fee directly from the past-due amounts. In contrast, when SSA 

awards SSI benefits only, or denies all benefits, the attorney must 

seek his or her fee from the client. Processing attorney fees is a 

labor-intensive chore, and in 1999 the Congress permitted SSA to 

withhold up to 6.3 percent of the amounts paid to offset some of 

those costs. 

SSA pays attorney fees in about 200,000 OASDI cases and concurrent (OASDI and SSI) cases a year. The average fee, still dampened by the $4,000 lid, is now about $2,700, and the average processing charge about $170. By 2013, CBO expects that annual volume will be about 240,000, the average fee about $3,600, and hence 

the average charge about $225. H.R. 743 proposes to cap the 

charge at $75 with future adjustments for inflation. That would 

erase more than half of expected receipts, a loss of $34 million in 

2013. CBO estimates that over the 2004–2013 period the proposed cap would cost $275 million. 

H.R. 743 also proposes to extend the attorney-fee system temporarily to SSI, starting nine months after enactment and ending 

with agreements for representation that are signed five years later. 

Because attorneys are most active in appealed cases, which may 

take a year to decide, those five years actually translate into more 

than six years of budgetary effects. SSA now approves, though it 

does not disburse, attorney fees in about 55,000 SSI-only cases a 

year. The average fee is about $1,900. (Because SSI benefits are 

lower than Disability Insurance’s (DI’s), the average fee—which 

cannot exceed 25 percent of past-due benefits—is also lower.) By 

2010, CBO estimates those figures would be about 60,000 and 

$2,200 respectively. Extending the payment system, including the 

6.3 percent processing charge, to SSI would bring in about $9 million. Capping the charge at $87 (the initial $75, adjusted for inflation), as H.R. 743 also proposes, would generate $5 million. Total 

collections over the 10-year period would be $26 million. 

Title IV. This title, labeled ‘‘Miscellaneous and Technical Amendments,’’ contains two provisions with significant budgetary effects. 

Both would affect state and local government employees. 

60-month employment requirement for exemption from Government Pension Offset. State and local governments have been permitted to join Social Security since the 1950s; since 1983, jurisdictions that had already joined have been barred from withdrawing. 

The Census Bureau counts 14 million active members and 6 milVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00065 Fmt 6659 Sfmt 6602 E:\HR\OC\HR046.XXX HR046
66

lion beneficiaries in 2,200 state and local government retirement 

plans. About one-quarter are not covered by Social Security.

Under current law, a retiree with a pension from noncovered 

state or local employment cannot collect a full Social Security benefit as a spouse or widow(er) of a covered worker. Instead, the government pension offset (GPO) trims the Social Security benefit by 

$2 for every $3 of the noncovered pension—often erasing the Social 

Security benefit entirely. The GPO’s drafters liken that to the way 

Social Security treats other spouses. A wife, for example, cannot 

collect her own retired-worker benefit plus an extra 50 percent of 

her husband’s benefit; instead, she gets the larger amount. In that 

analogy, two-thirds of the pension from noncovered work is akin to 

a retired-worker benefit. 

H.R. 743 would limit a tactic that some public employees are 

using to skirt the GPO. The offset applies to state and local retirees 

whose last day of employment under their pension plan was not 

covered. The General Accounting Office (GAO) reports that some 

workers have learned that by switching jobs for a short time— sometimes just one day—they can avoid a lifetime of GPO-related 

reductions. Specifically, GAO found 4,800 such transfers through 

June 2002. Almost all were in Texas. H.R. 743 proposes to replace 

the ‘‘last-day’’ rule with a 60-month requirement—the same rule 

that applies to federal civil servants. 

GPO had to judge how the job-switching detected by GAO might 

evolve over time. Of the 4,800 transfers that GAO found, 3,500 occurred in 2002 alone, where they amounted to a quarter of retirements in the Teachers’ Retirement System of Texas that year. GAO 

found only a handful of cases outside Texas but voiced concern that 

the practice would spread. 

To gauge that possibility, CBO looked at retirement plans in the 

six states—California, Colorado, Illinois, Louisiana, Massachusetts, 

and Ohio—that with Texas account for 75 percent of noncovered 

employees. CBO concluded that conditions in Texas are uniquely 

favorable to ‘‘last-day’’ switches. Texas combines a huge noncovered 

sector, a small covered sector, and a statewide plan that recognizes 

service in both. In other states, employees who sought a covered job 

would have to change occupations (for example, from law enforcement to teacher) and forfeit some advantages of their original plan; 

in others, such as Ohio and Massachusetts, no covered positions 

exist. California, with its mix of covered and noncovered jurisdictions, bears the closest resemblance to Texas but has fewer noncovered jobs and thus fewer employees with an incentive to switch. 

If the ‘‘last-day’’ rule remains, states could face pressure to amend 

their plans to make such transfers easier. But plan amendments 

are complex and time-consuming. 

Under current law, CBO assumes that annual transfers spurred 

by the ‘‘last-day’’ rule will climb to 7,000 in 2004—twice the number in 2002, enough to accommodate further growth in Texas 

(where the practice clearly had not peaked) and some spillover to 

other states. Under H.R. 743, significant savings in Social Security 

would follow in about seven years. That lag stems from the programs’ contrasting rules for eligibility: a typical retiree under the 

Texas teachers’ plan qualifies for a pension at age 55 and (if the 

GPO does not erase it) for Social Security at age 62. Thus, the first 

batch of 7,000 annuitants who retire in calendar 2004 would reach 

67

62 in 2011. Spouses and widow(er)s affected by the GPO in December 2001 saw their Social Security reduced by an average of $312 

and $479, respectively. Adjusting those figures for inflation and for 

the age and sex of the affected group led CBO to assume those 

7,000 would lose an average of $525, or $4 million in December 

2011. Savings in 2001 are just $26 million because the fiscal year 

ends in September and birthdays occur throughout the year. By 

December 2013, three cohorts of retirees push the monthly savings 

up to $10 million; savings in fiscal year 2013 equal $80 million. 

Real-life cases would be more varied than these simple examples. 

Some annuitants retire after 55 (and reach 62 years old before 

2011); some are widowed (and qualify for Social Security at age 60, 

not at age 62); and others must wait for a younger spouse to reach 

62 years old. But these typical cases illustrate why CBO estimates 

small savings through 2010 and rapidly growing amount after that. 

Permission for Kentucky to operate divided retirement systems. 

Under section 218 of the Social Security Act, 21 state are allowed 

to operate retirement systems in which some but not all employees 

are covered under Social Security. In divided systems, new employees must pay Social Security tax, but employees already on the 

payroll may choose their coverage. H.R. 743 would add Kentucky 

to the list. A planned merger of two Louisville-area fire and police 

departments apparently spurs the provision. CBO assumes that 

200 of the 1,300 workers affected would choose Social Security, and 

60 or so new hires each year would add to their ranks. Extra Social 

Security taxes would grow from $1 million in 2004 to $5 million in 

2013. Workers who switch coverage can avoid or soften the GPO 

and the windfall elimination provision, another rule that limits retired-worker (rather than spouse or survivor) benefits when beneficiaries get a pension from noncovered employment. Only a minority of the newly covered employees, through, would qualify for Social Security in the next 10 years, and CBO estimates extra costs 

of $1 million in 2013. 

Other provisions. H.R. 743 would correct sections of the Ticket 

to Work and Work Incentives Improvement Act of 1999 (Public 

Law 106–170) that govern SSA’s research and demonstration 

projects. It would allow SSA to continue waiving certain provisions 

of law, when appropriate, for projects initiated before December 

2004. Currently such waivers will expire abruptly on that date, 

even for projects already launched. SSA does not expect to use such 

waivers extensively other than for the $1-for-$2 demonstrations 

(see below), so CBO ascribes a negligible cost. 

DI beneficiaries face limits on their earnings. Applicants who 

earn more than $800 a month (labeled substantial gainful activity, 

or SGA) in 2003 cannot quality for DI; beneficiaries who make 

more than that for a nine-month trial work period and three-month 

grace period lose their entire check. The 1999 law directed SSA to 

conduct demonstrations in which checks would be reduced by $1 for 

each $2 of earnings over certain thresholds. But that law left unclear how the projects would be funded. H.R. 743 clarifies that SSA 

would pay benefits from the trust fund and other costs—for the design, conduct, and evaluation of the demonstrations—from its appropriation for administrative expenses. 

In the meantime, statisticians and other experts have advised 

SSA to conduct $1-for-$2 demonstrations narrower in scope than 

68

CBO assumed in 1999. In particular, they believe SSA cannot realistically measure ‘‘induced filers’’ via the demonstrations. Induced 

filers—workers with severe impairments who would not otherwise 

have applied for benefits but who are attracted by a more liberal 

treatment of earnings—dominated CBO’s earlier analyses of the 

demonstrations’ costs. (As SSA’s plans became clearer, CBO removed those estimated costs from its baseline.) CBO expects that 

targeting the experiments only at a sample of current recipients 

would lead to little net change in benefits. 

H.R. 743 would broaden the Work Opportunity Tax Credit to 

cover people who use a ticket for vocational rehabilitation (VR) 

under the 1999 law. That credit, which expires after December 

2003, allows employers to subtract up to 40 percent of the first 

$6,000 of wages from income tax when they hire members of targeted groups. People referred by state VR agencies are one such 

group; H.R. 743 would add DI and SSI beneficiaries who choose 

other VR providers, such as private firms or nonprofit organizations. The first tickets were distributed in 2002 and nationwide implementation will take three years. Because the tickets program is 

still in its early stages, the Joint Committee on Taxation estimates 

that broadening eligibility for the tax credit would reduce revenues 

by $2 million in 2004. 

Title IV would expand eligibility for widows’ and widowers’ benefits in narrow circumstances. To collect Social Security on a deceased worker’s record, a widow or widower must either have been 

married to the worker for nine months or be actively caring for the 

worker’s child. Lawmakers recently learned about an unusual case 

in which a worker could not marry his longtime companion because 

state law forbade him from divorcing his wife, who was in a mental 

institution. When his wife’s death finally permitted him to remarry, he was already terminally ill and died a few months later. 

H.R. 743 would waive the duration-of-marriage requirement in 

those rare circumstances. Only one such case has come to light and 

CBO assumes that the provision would have little cost. 

Spending subject to appropriation 

CBO estimates that implementing H.R. 743 would cost SSA $15 

million to $20 million a year in extra enforcement and processing 

expenses through 2010. Extending the attorney-fee program to SSI 

is the biggest piece, accounting for $11 million to $14 million a 

year. 

Under H.R. 743, SSA would split the first SSI check into at least 

two parts—one for the attorney and one for the beneficiary—as it 

does in DI. (A third party—the state—may also claim a share if it 

paid benefits under a so-called interim assistance program.) Based 

on a GAO report, CBO assumes that each DI case that involves attorney fees will cost SSA aboiut $235 in 2004. About $50 of that 

is for fee approval (which SSA already performs in SSI) but $185 

is for fee processing (which SSA does not do in SSI). Multiplying 

by the assumed volume of cases yields expected costs of $11 million 

in 2004 and slightly more through 2010, when the provision would 

expire. 

Other provisions—chiefly those that would mandate more on-site 

inspections, bonding and licensing, and related scrutiny of representative payees and require SSA to produce new studies and reVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00068 Fmt 6659 Sfmt 6602 E:\HR\OC\HR046.XXX HR046
69

ports—would cost an estimated $8 million in 2004 and $4 million 

to $6 million a year thereafter. The SSI and DI programs each 

would account for about half of those amounts. 

On-budget effects on direct spending and revenues: The Congressional Budget Act labels Social Security ‘‘off-budget’’ and excludes 

it from the President’s budget, the House and Senate budget resolutions, and the Balanced Budget and Emergency Deficit Control 

Act of 1985. The net changes in governmental receipts (i.e., revenues) and outlays from direct spending—excluding Social Security—over the 2004–2013 period are shown in the following table.

By fiscal year, in millions of dollars—

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013

Changes in outlays ........................... 0 ¥8 ¥15 ¥19 ¥23 ¥26 ¥28 ¥25 ¥25 ¥27

Changes in receipts .......................... ¥20 0 0 0 0 0 0 0 0

Intergovernmental and private-sector impact: Section 4 of the 

Unfunded Mandates Reform Act excludes from the provisions of 

that act any provision in a bill that relates to the Old-Age, Survivors, and Disability Insurance program under title II of the Social 

Security Act. The provisions of H.R. 743 that amend title II would 

fall within that exclusion.

Other provisions of the bill contain no intergovernmental mandates as defined in UMRA and would impose no costs on state, 

local, or tribal governments. They do, however, contain private-sector mandates as defined in UMRA. Section 204 would prohibit private entities from charging a fee for certain products and services 

that are available for free from SSA unless, at the time the offer 

is made, they provide a statement to that effect. Section 302 would 

impose a processing charge on private attorneys to whom SSA 

would disburse fees related to their representation of successful 

SSI claimants. CBO estimates that the costs to the private sector 

of those mandates would not exceed the threshold established by 

UMRA ($117 million in 2003, adjusted annually for inflation). 

Previous CBO estimate: On March 4, CBO transmitted a cost estimate for the introduced version of H.R. 743. That estimate cited 

a combined $649 million in direct spending reductions and revenue 

increases over the 2004–2013 period. The version of the bill approved by the Committee on Ways and Means on March 13 differs 

slightly from the introduced version. Changes in the attorney-fee 

provisions—rounding the future cap on processing charges to the 

next lower $1 (rather than $10) and extending the program to SSI 

for five years (rather than three)—would add $32 million to SSA’s 

receipts over the 2004–2013 period. CBO changed its estimate of 

the Medicare savings that would stem from the ban on Social Security benefits for fugitives, shrinking them by $25 million. The earlier estimate had assumed incorrectly that the ban on Social Security benefits also led to a ban on Medicare benefits. In total, CBO 

judges that H.R. 743 as ordered reported would trim direct spending and boost revenues by a combined $655 million over the 10-

year period. 

Estimate prepared by: Federal Spending: Kathy Ruffing; Federal 

Revenues: Edward Harris and Annabelle Bartsch; Impact on State, 

Local, and Tribal Governments: Leo Lex; and Impact on the Private Sector: Ralph Smith. 

70

Estimate Approved by: Peter H. Fontaine, Deputy Assistant Director for Budget Analysis.

D. MACROECONOMIC IMPACT ANALYSIS

In compliance with clause 3(h)(2) of rule XIII of the Rules of the 

House of Representatives, the following statement is made by the 

Joint Committee on Taxation with respect to the provisions of the 

bill amending the Internal Revenue Code of 1986: the effects of the 

bill on economic activity are so small as to be incalculable within 

the context of a model of the aggregate economy. 

V. OTHER MATTERS REQUIRED TO BE DISCUSSED 

UNDER THE RULES OF THE HOUSE 

A. COMMITTEE OVERSIGHT FINDINGS AND RECOMMENDATIONS

With respect to clause 3(c)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee reports that the need for 

this legislation resulted from hearings conducted by the Subcommittee on Social Security in the 106th, 107th, and 108th Congresses. Details of these hearings are included in Title I. Summary 

and Background, Part C. Legislative History. 

B. STATEMENT OF GENERAL PERFORMANCE GOALS AND OBJECTIVES

In compliance with clause 3(c)(4) of rule XIII of the Rules of the 

House of Representatives, the Committee states that H.R. 743 the 

bill contains measures that authorize funding for improving protection of beneficiaries with representative payees; addressing waste, 

fraud, and abuse in the program; enhancing provisions under the 

Ticket to Work and Work Incentives Improvement Act; as well as 

providing compensation to the Social Security Advisory Board. 

These measures will expand the Social Security Administration’s 

ability to meet its stated goals of (1) ensuring the integrity of Social 

Security programs with zero tolerance for fraud and abuse; and, (2) 

promoting valued, strong, and responsive Social Security programs 

and conducting effective policy development, research, and program 

evaluation. 

Through reporting requirements in this legislation, as well as reporting on achievement of performance objectives and measures 

laid out in the Social Security Administration’s Annual Performance and Accountability Report, Congress and the Administration 

will be able to assess achievement of the related program objectives, including: (1) aggressively deter, identify, and resolve fraud; 

(2) increasing the number of SSDI and SSI disability beneficiaries 

who achieve steady employment and no longer receive cash benefits; and (3) improving the accuracy of processing post entitlement 

events. 

C. CONSTITUTIONAL AUTHORITY STATEMENT

In compliance with clause 3(d)(1) of rule XIII of the Rules of the 

House of Representatives, the Committee states that the Committee’s action in reporting this bill is derived from Article I of the 

Constitution, Section 8 (‘‘The Congress shall have Power to lay and 

collect Taxes, Duties, Imposts and Excises * * * ’’), and from the 

16th Amendment to the Constitution. 

71

D. INFORMATION RELATING TO UNFUNDED MANDATES

This information is provided in accordance with Section 423 of 

the Unfunded Mandates Reform Act of 1995 (P.L. 104–4). 

The Committee has determined that the bill does not impose a 

Federal intergovernmental mandate on State, local, or tribal governments. The Committee has determined that the bill does contain Federal mandates on the private sector. However, those mandates would not exceed the threshold established by Section 4 of 

the Unfunded Mandates Reform Act. 

E. APPLICABILITY OF HOUSE RULE XXI 5(b) 

Rule XXI 5(b) of the Rules of the House of Representatives provides, in part, that ‘‘A bill or joint resolution, amendment, or conference report carrying a Federal income tax rate increase may not 

be considered as passed or agreed to unless so determined by a 

vote of not less than three-fifths of the Members voting, a quorum 

being present.’’ The Committee has carefully reviewed the provisions of the bill, and states that the provisions of the bill do not 

involve any Federal income tax rate increases within the meaning 

of the rule. 

F. TAX COMPLEXITY ANALYSIS

Section 4022(b) of the Internal Revenue Service Reform and Restructuring Act of 1998 (the ‘‘IRS Reform Act’’) requires the Joint 

Committee on Taxation (in consultation with the Internal Revenue 

Service and the Department of the Treasury) to provide a tax complexity analysis. The complexity analysis is required for all legislation reported by the House Committee on Ways and Means, the 

Senate Committee on Finance, or any committee of conference if 

the legislation includes a provision that directly or indirectly 

amends the Internal Revenue Code and has widespread applicability to individuals or small businesses. 

The staff of the Joint Committee on Taxation has determined 

that a complexity analysis is not required under section 4022(b) of 

the IRS Reform Act because the bill contains no provisions that 

amend the Internal Revenue Code and that have ‘‘widespread applicability’’ to individuals or small businesses.

VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS 

REPORTED 

In compliance with clause 3(e) of rule XIII of the Rules of the 

House of Representatives, changes in existing law made by the bill, 

as reported, are shown as follows (existing law proposed to be omitted is enclosed in black brackets, new matter is printed in italics, 

existing law in which no change is proposed is shown in roman): 

SOCIAL SECURITY ACT 

* * * * * * *

TITLE II—FEDERAL OLD-AGE, SURVIVORS, AND DISABILITY 

INSURANCE BENEFITS 

* * * * * * *

72

AGE AND SURVIVORS INSURANCE BENEFIT PAYMENTS

Old Age Insurance Benefits 

SEC. 202. (a)***

Wife’s Insurance Benefits 

(b)(1)***

* * * * * * *

(4)(A) The amount of a wife’s insurance benefit for each month 

(as determined after application of the provisions of subsections (q) 

and (k)) shall be reduced (but not below zero) by an amount equal 

to two-thirds of the amount of any monthly periodic benefit payable 

to the wife (or divorced wife) for such month which is based upon 

her earnings while in the service of the Federal Government or any 

State (or political subdivision thereof, as defined in section 

218(b)(2)) øif, on¿ if, during any portion of the last 60 months of 

such service ending with the last day she was employed by such entity— (i) * * *

* * * * * * *

Husband’s Insurance Benefits 

(c)(1)***

(2)(A) The amount of a husband’s insurance benefit for each 

month (as determined after application of the provisions of subsections (q) and (k)) shall be reduced (but not below zero) by an 

amount equal to two-thirds of the amount of any monthly periodic 

benefit payable to the husband (or divorced husband) for such 

month which is based upon his earnings while in the service of the 

Federal Government or any State (or political subdivision thereof, 

as defined in section 218(b)(2)) øif, on¿ if, during any portion of the 

last 60 months of such service ending with the last day he was employed by such entity—

(i) * * *

* * * * * * *

Widow’s Insurance Benefits 

(e)(1)***

* * * * * * *

(7)(A) The amount of a widow’s insurance benefit for each month 

(as determined after application of the provisions of subsections (q) 

and (k), paragraph (2)(D), and paragraph (3)) shall be reduced (but 

not below zero) by an amount equal to two-thirds of the amount of 

any monthly periodic benefit payable to the widow (or surviving divorced wife) for such month which is based upon her earnings 

while in the service of the Federal Government or any State (or political subdivision thereof, as defined in section 218(b)(2)) øif, on¿

if, during any portion of the last 60 months of such service ending 

with the last day she was employed by such entity—

(i) * * *

* * * * * * *

73

Widower’s Insurance Benefits 

(f)(1)***

(2)(A) The amount of a widower’s insurance benefit for each 

month (as determined after application of the provisions of subsections (q) and (k), paragraph (3)(D), and paragraph (4)) shall be 

reduced (but not below zero) by an amount equal to two-thirds of 

the amount of any monthly periodic benefit payable to the widower 

(or surviving divorced husband) for such month which is based 

upon his earnings while in the service of the Federal Government 

or any State (or political subdivision thereof, as defined in section 

218(b)(2)) øif, on¿ if, during any portion of the last 60 months of 

such service ending with the last day he was employed by such entity—

(i) * * *

* * * * * * *

Mother’s and Father’s Insurance Benefits 

(g)(1)***

* * * * * * *

(4)(A) The amount of a mother’s or father’s insurance benefit for 

each month (as determined after application of the provisions of 

subsection (k)) shall be reduced (but not below zero) by an amount 

equal to two-thirds of the amount of any monthly periodic benefit 

payable to the individual for such month which is based upon the 

individual’s earnings while in the service of the Federal Government or any State (or political subdivision thereof, as defined in 

section 218(b)(2)) øif, on¿ if, during any portion of the last 60 

months of such service ending with the last day the individual was 

employed by such entity—

(i) * * *

* * * * * * *

Termination of Benefits Upon øDeportation¿ Removal of Primary 

Beneficiary 

(n)(1) If any individual is (after the date of enactment of this subsection) ødeported under section 241(a) (other than under paragraph (1)(C) or (1)(E) thereof)¿ removed under section 237(a) (other 

than paragraph (1)(C) thereof) or 212(a)(6)(A) of the Immigration 

and Nationality Act, then, notwithstanding any other provisions of 

this title—

(A) no monthly benefit under this section or section 223 shall 

be paid to such individual, on the basis of his wages and self 

employment income, for any month occurring (i) after the 

month in which the Commissioner of Social Security is notified 

by the Attorney General that such individual has been so ødeported¿ removed, and (ii) before the month in which such individual is thereafter lawfully admitted to the United States for 

permanent residence, 

* * * * * * *

(2) As soon as practicable after the ødeportation¿ removal of any 

individual øunder any of the paragraphs of section 241(a) of the 

74

Immigration and Nationality Act (other than under paragraph 

(1)(C) or (1)(E) thereof)¿ under any of the paragraphs of section 

237(a) of the Immigration and Nationality Act (other than paragraph (1)(C) thereof) or under section 212(a)(6)(A) of such Act, the 

Attorney General shall notify the Commissioner of Social Security 

of such ødeportation¿ removal. (3) For purposes of paragraphs (1) and (2) of this subsection, an 

individual against whom a final order of ødeportation¿ removal has 

been issued under øparagraph (19) of section 241(a)¿ subparagraph 

(D) of section 237(a)(4) of the Immigration and Nationality Act (relating to persecution of others on account of race, religion, national 

origin, or political opinion, under the direction of or in association 

with the Nazi government of Germany or its allies) shall be considered to have been ødeported¿ removed under such øparagraph 

(19)¿ subparagraph (D) as of the date on which such order became 

final. 

* * * * * * *

Limitation on Payments to øPrisoners and Certain Other Inmates 

of Publicly Funded Institutions¿ Prisoners, Certain Other Inmates of Publicly Funded Institutions, Fugitives, Probationers, 

and Parolees

(x)(1)(A) Notwithstanding any other provision of this title, no 

monthly benefits shall be paid under this section or under section 

223 to any individual for any month ending with or during or beginning with or during a period of more than 30 days throughout 

all of which such individual— (i) * * *

(ii) is confined by court order in an institution at public expense in connection with— (I) * * *

* * * * * * *

(IV) a similar verdict or finding with respect to such an 

offense based on similar factors (such as a mental disease, 

a mental defect, or mental incompetence), øor¿

(iii) immediately upon completion of confinement as described in clause (i) pursuant to conviction of a criminal offense 

an element of which is sexual activity, is confined by court 

order in an institution at public expense pursuant to a finding 

that the individual is a sexually dangerous person or a sexual 

predator or a similar findingø.¿,

(iv) is fleeing to avoid prosecution, or custody or confinement 

after conviction, under the laws of the place from which the person flees, for a crime, or an attempt to commit a crime, which 

is a felony under the laws of the place from which the person 

flees, or which, in the case of the State of New Jersey, is a high 

misdemeanor under the laws of such State, or 

(v) is violating a condition of probation or parole imposed 

under Federal or State law. 

In the case of an individual from whom such monthly benefits have 

been withheld pursuant to clause (iv) or (v), the Commissioner may, 

for good cause shown, pay such withheld benefits to the individual.

* * * * * * *

75

(3)(A)***

* * * * * * *

(C) Notwithstanding the provisions of section 552a of title 5, 

United States Code, or any other provision of Federal or State law 

(other than section 6103 of the Internal Revenue Code of 1986 and 

section 1106(c) of this Act), the Commissioner shall furnish any 

Federal, State, or local law enforcement officer, upon the written request of the officer, with the current address, Social Security number, and photograph (if applicable) of any beneficiary under this 

title, if the officer furnishes the Commissioner with the name of the 

beneficiary, and other identifying information as reasonably required by the Commissioner to establish the unique identity of the 

beneficiary, and notifies the Commissioner that—

(i) the beneficiary—

(I) is described in clause (iv) or (v) of paragraph (1)(A); 

and 

(II) has information that is necessary for the officer to 

conduct the officer’s official duties; and 

(ii) the location or apprehension of the beneficiary is within 

the officer’s official duties.

* * * * * * *

EVIDENCE, PROCEDURE, AND CERTIFICATION FOR PAYMENT

SEC. 205. (a)***

* * * * * * *

(g) Any individual, after any final decision of the Commissioner 

of Social Security made after a hearing to which he was a party, 

irrespective of the amount in controversy, may obtain a review of 

such decision by a civil action commenced within sixty days after 

the mailing to him of notice of such decision or within such further 

time as the Commissioner of Social Security may allow. Such action shall be brought in the district court of the United States for 

the judicial district in which the plaintiff resides, or has his principal place of business, or, if he does not reside or have his principal place of business within any such judicial district, in the 

United States District Court for the District of Columbia. As part 

of the Commissioner’s answer the Commissioner of Social Security 

shall file a certified copy of the transcript of the record including 

the evidence upon which the findings and decision complained of 

are based. The court shall have power to enter, upon the pleadings 

and transcript of the record, a judgment affirming, modifying, or 

reversing the decision of the Commissioner of Social Security, with 

or without remanding the cause for a rehearing. The findings of the 

Commissioner of Social Security as to any fact, if supported by substantial evidence, shall be conclusive, and where a claim has been 

denied by the Commissioner of Social Security or a decision is rendered under subsection (b) hereof which is adverse to an individual 

who was a party to the hearing before the Commissioner of Social 

Security, because of failure of the claimant or such individual to 

submit proof in conformity with any regulation prescribed under 

subsection (a) hereof, the court shall review only the question of 

conformity with such regulations and the validity of such regulations. The court may, on motion of the Commissioner of Social SeVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00075 Fmt 6659 Sfmt 6601 E:\HR\OC\HR046.XXX HR046
76

curity made for good cause shown before the Commissioner files 

the Commissioner’s answer, remand the case to the Commissioner 

of Social Security for further action by the Commissioner of Social 

Security, and it may at any time order additional evidence to be 

taken before the Commissioner of Social Security, but only upon a 

showing that there is new evidence which is material and that 

there is good cause for the failure to incorporate such evidence into 

the record in a prior proceeding; and the Commissioner of Social 

Security shall, after the case is remanded, and after hearing such 

additional evidence if so ordered, modify or affirm the Commissioner’s findings of fact or the Commissioner’s decision, or both, 

and shall file with the court any such additional and modified findings of fact and decision, øand a transcript¿ and, in any case in 

which the Commissioner has not made a decision fully favorable to 

the individual, a transcript of the additional record and testimony 

upon which the Commissioner’s action in modifying or affirming 

was based. Such additional or modified findings of fact and decision 

shall be reviewable only to the extent provided for review of the 

original findings of fact and decision. The judgment of the court 

shall be final except that it shall be subject to review in the same 

manner as a judgment in other civil actions. Any action instituted 

in accordance with this subsection shall survive notwithstanding 

any change in the person occupying the office of Commissioner of 

Social Security or any vacancy in such office. 

* * * * * * *

Representative Payees 

(j)(1)***

(2)(A)***

(B)(i) As part of the investigation referred to in subparagraph 

(A)(i), the Commissioner of Social Security shall— (I) * * *

* * * * * * *

(III) determine whether such person has been convicted of a 

violation of section 208, 811, or 1632, øand¿

(IV) obtain information concerning whether such person has 

been convicted of any other offense under Federal or State law 

which resulted in imprisonment for more than 1 year, 

(V) obtain information concerning whether such person is a 

person described in section 202(x)(1)(A)(iv), and

ø(IV)¿ (VI) determine whether certification of payment of 

benefits to such person has been revoked pursuant to this subsection, the designation of such person as a representative 

payee has been revoked pursuant to section 807(a), or payment 

of benefits to such person has been terminated pursuant to section 1631(a)(2)(A)(iii) by reason of misuse of funds paid as benefits under this title, title VIII, or title XVI. 

* * * * * * *

(iii) Notwithstanding the provisions of section 552a of title 5, 

United States Code, or any other provision of Federal or State law 

(other than section 6103 of the Internal Revenue Code of 1986 and 

section 1106(c) of this Act), the Commissioner shall furnish any 

Federal, State, or local law enforcement officer, upon the written reVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00076 Fmt 6659 Sfmt 6603 E:\HR\OC\HR046.XXX HR046
77

quest of the officer, with the current address, social security account 

number, and photograph (if applicable) of any person investigated 

under this paragraph, if the officer furnishes the Commissioner 

with the name of such person and such other identifying information as may reasonably be required by the Commissioner to establish the unique identity of such person, and notifies the Commissioner that— (I) such person is described in section 202(x)(1)(A)(iv), 

(II) such person has information that is necessary for the officer to conduct the officer’s official duties, and 

(III) the location or apprehension of such person is within the 

officer’s official duties.

(C)(i) Benefits of an individual may not be certified for payment 

to any other person pursuant to this subsection if— (I) * * *

(II) except as provided in clause (ii), certification of payment 

of benefits to such person under this subsection has previously 

been revoked as described in øsubparagraph (B)(i)(IV),,¿ subparagraph (B)(i)(VI) the designation of such person as a representative payee has been revoked pursuant to section 807(a), 

or payment of benefits to such person pursuant to section 

1631(a)(2)(A)(ii) has previously been terminated as described in 

øsection 1631(a)(2)(B)(ii)(IV)¿ section 1631(a)(2)(B)(ii)(VI), øor¿

(III) except as provided in clause (iii), such person is a creditor of such individual who provides such individual with goods 

or services for considerationø.¿, (IV) such person has previously been convicted as described 

in subparagraph (B)(i)(IV), unless the Commissioner determines 

that such certification would be appropriate notwithstanding 

such conviction, or 

(V) such person is person described in section 202(x)(1)(A)(iv).

* * * * * * *

(v) In the case of an individual described in paragraph (1)(B), 

when selecting such individual’s representative payee, preference 

shall be given to—

(I) øa community-based nonprofit social service agency licensed or bonded by the State¿ a certified community-based 

nonprofit social service agency (as defined in paragraph (10)), 

* * * * * * *

(3)(A)***

* * * * * * *

(E) In any case in which the person described in subparagraph 

(A) or (D) receiving payments on behalf of another fails to submit 

a report required by the Commissioner of Social Security under subparagraph (A) or (D), the Commissioner may, after furnishing notice to such person and the individual entitled to such payment, require that such person appear in person at a field office of the Social Security Administration serving the area in which the individual resides in order to receive such payments.

ø(E)¿ (F) The Commissioner of Social Security shall maintain a 

centralized file, which shall be updated periodically and which 

shall be in a form which will be readily retrievable by each servicing office of the Social Security Administration, of—

78

(i) * * *

* * * * * * *

ø(F)¿ (G) Each servicing office of the Administration shall maintain a list, which shall be updated periodically, of public agencies 

and øcommunity-based nonprofit social service agencies¿ certified 

community-based nonprofit social service agencies (as defined in 

paragraph (10)) which are qualified to serve as representative payees pursuant to this subsection or section 807 or 1631(a)(2) and 

which are located in the area served by such servicing office. 

(4)(A)(i) øA¿ Except as provided in the next sentence, a qualified 

organization may collect from an individual a monthly fee for expenses (including overhead) incurred by such organization in providing services performed as such individual’s representative payee 

pursuant to this subsection if such fee does not exceed the lesser 

of—

(I) * * *

(II) $25.00 per month ($50.00 per month in any case in 

which the individual is described in paragraph(1)(B)). 

øThe Secretary¿ A qualified organization may not collect a fee from 

an individual for any month with respect to which the Commissioner of Social Security or a court of competent jurisdiction has determined that the organization misused all or part of the individual’s benefit, and any amount so collected by the qualified organization for such month shall be treated as a misused part of the individual’s benefit for purposes of paragraphs (5) and (6). The Commissioner shall adjust annually (after 1995) each dollar amount set 

forth in subclause (II) under procedures providing for adjustments 

in the same manner and to the same extent as adjustments are 

provided for under the procedures used to adjust benefit amounts 

under section 215(i)(2)(A), except that any amount so adjusted that 

is not a multiple of $1.00 shall be rounded to the nearest multiple 

of $1.00. 

* * * * * * *

(B) For purposes of this paragraph, the term ‘‘qualified organization’’ means any State or local government agency whose mission 

is to carry out income maintenance, social service, or health carerelated activities, any State or local government agency with fiduciary responsibilities, or øany community-based nonprofit social 

service agency which is bonded or licensed in each State in which 

it serves as a representative payee¿ any certified community-based 

nonprofit social service agency (as defined in paragraph (10)), if 

such agency, in accordance with any applicable regulations of the 

Commissioner of Social Security— (i) * * *

* * * * * * *

(5) In cases where the negligent failure of the Commissioner of 

Social Security to investigate or monitor a representative payee results in misuse of benefits by the representative payee, the Commissioner of Social Security shall certify for payment to the beneficiary or the beneficiary’s alternative representative payee an 

amount equal to such misused benefits. In any case in which a representative payee that—

79

(A) is not an individual (regardless of whether it is a ‘‘qualified organization’’ within the meaning of paragraph (4)(B)); or 

(B) is an individual who, for any month during a period 

when misuse occurs, serves 15 or more individuals who are 

beneficiaries under this title, title VIII, title XVI, or any combination of such titles;

misuses all or part of an individual’s benefit paid to such representative payee, the Commissioner of Social Security shall certify for 

payment to the beneficiary or the beneficiary’s alternative representative payee an amount equal to the amount of such benefit so misused. The provisions of this paragraph are subject to the limitations 

of paragraph (7)(B). The Commissioner of Social Security shall 

make a good faith effort to obtain restitution from the terminated 

representative payee. 

ø(6) The Commissioner of Social Security shall include as a part 

of the annual report required under section 704 information with 

respect to the implementation of the preceding provisions of this 

subsection, including the number of cases in which the representative payee was changed, the number of cases discovered where 

there has been a misuse of funds, how any such cases were dealt 

with by the Commissioner of Social Security, the final disposition 

of such cases, including any criminal penalties imposed, and such 

other information as the Commissioner of Social Security determines to be appropriate.¿

(6)(A) In addition to such other reviews of representative payees 

as the Commissioner of Social Security may otherwise conduct, the 

Commissioner shall provide for the periodic onsite review of any 

person or agency located in the United States that receives the benefits payable under this title (alone or in combination with benefits 

payable under title VIII or title XVI) to another individual pursuant 

to the appointment of such person or agency as a representative 

payee under this subsection, section 807, or section 1631(a)(2) in any 

case in which— (i) the representative payee is a person who serves in that capacity with respect to 15 or more such individuals; 

(ii) the representative payee is a certified community-based 

nonprofit social service agency (as defined in paragraph (10) of 

this subsection or section 1631(a)(2)(I)); or 

(iii) the representative payee is an agency (other than an 

agency described in clause (ii)) that serves in that capacity with 

respect to 50 or more such individuals. 

(B) Within 120 days after the end of each fiscal year, the Commissioner shall submit to the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the Senate a report on the results of periodic onsite reviews conducted during the fiscal year pursuant to subparagraph (A) and of any other 

reviews of representative payees conducted during such fiscal year 

in connection with benefits under this title. Each such report shall 

describe in detail all problems identified in such reviews and any 

corrective action taken or planned to be taken to correct such problems, and shall include—

(i) the number of such reviews; 

(ii) the results of such reviews; 

(iii) the number of cases in which the representative payee 

was changed and why; 

80

(iv) the number of cases involving the exercise of expedited, 

targeted oversight of the representative payee by the Commissioner conducted upon receipt of an allegation of misuse of 

funds, failure to pay a vendor, or a similar irregularity; 

(v) the number of cases discovered in which there was a misuse of funds; 

(vi) how any such cases of misuse of funds were dealt with 

by the Commissioner; 

(vii) the final disposition of such cases of misuse of funds, including any criminal penalties imposed; and 

(viii) such other information as the Commissioner deems appropriate. 

(7)(A) If the Commissioner of Social Security or a court of competent jurisdiction determines that a representative payee that is not 

a Federal, State, or local government agency has misused all or part 

of an individual’s benefit that was paid to such representative payee 

under this subsection, the representative payee shall be liable for the 

amount misused, and such amount (to the extent not repaid by the 

representative payee) shall be treated as an overpayment of benefits 

under this title to the representative payee for all purposes of this 

Act and related laws pertaining to the recovery of such overpayments. Subject to subparagraph (B), upon recovering all or any part 

of such amount, the Commissioner shall certify an amount equal to 

the recovered amount for payment to such individual or such individual’s alternative representative payee. 

(B) The total of the amount certified for payment to such individual or such individual’s alternative representative payee under 

subparagraph (A) and the amount certified for payment under paragraph (5) may not exceed the total benefit amount misused by the 

representative payee with respect to such individual.

ø(7)¿ (8) For purposes of this subsection, the term ‘‘benefit based 

on disability’’ of an individual means a disability insurance benefit 

of such individual under section 223 or a child’s, widow’s, or widower’s insurance benefit of such individual under section 202 based 

on such individual’s disability.

(9) For purposes of this subsection, misuse of benefits by a representative payee occurs in any case in which the representative 

payee receives payment under this title for the use and benefit of another person and converts such payment, or any part thereof, to a 

use other than for the use and benefit of such other person. The 

Commissioner of Social Security may prescribe by regulation the 

meaning of the term ‘‘use and benefit’’ for purposes of this paragraph. 

(10) For purposes of this subsection, the term ‘‘certified community-based nonprofit social service agency’’ means a communitybased nonprofit social service agency which is in compliance with 

requirements, under regulations which shall be prescribed by the 

Commissioner, for annual certification to the Commissioner that it 

is bonded in accordance with requirements specified by the Commissioner and that it is licensed in each State in which it serves as a 

representative payee (if licensing is available in such State) in accordance with requirements specified by the Commissioner. Any 

such annual certification shall include a copy of any independent 

81

audit on such agency which may have been performed since the previous certification.

* * * * * * *

REPRESENTATION OF CLAIMANTS

SEC. 206. (a)(1) The Commissioner of Social Security may prescribe rules and regulations governing the recognition of agents or 

other persons, other than attorneys as hereinafter provided, representing claimants before the Commissioner of Social Security, 

and may require of such agents or other persons, before being recognized as representatives of claimants that they shall show that 

they are of good character and in good repute, possessed of the necessary qualifications to enable them to render such claimants valuable service, and otherwise competent to advise and assist such 

claimants in the presentation of their cases. An attorney in good 

standing who is admitted to practice before the highest court of the 

State, Territory, District, or insular possession of his residence or 

before the Supreme Court of the United States or the inferior Federal courts, shall be entitled to represent claimants before the Commissioner of Social Security. Notwithstanding the preceding sentences, the Commissioner, after due notice and opportunity for hearing, (A) may refuse to recognize as a representative, and may disqualify a representative already recognized, any attorney who has 

been disbarred or suspended from any court or bar to which he or 

she was previously admitted to practice or who has been disqualified from participating in or appearing before any Federal program 

or agency, and (B) may refuse to recognize, and may disqualify, as 

a non-attorney representative any attorney who has been disbarred 

or suspended from any court or bar to which he or she was previously admitted to practice. A representative who has been disqualified or suspended pursuant to this section from appearing before the Social Security Administration as a result of collecting or 

receiving a fee in excess of the amount authorized shall be barred 

from appearing before the Social Security Administration as a representative until full restitution is made to the claimant and, thereafter, may be considered for reinstatement only under such rules as 

the Commissioner may prescribe. The Commissioner of Social Security may, after due notice and opportunity for hearing, suspend or 

prohibit from further practice before the Commissioner any such 

person, agent, or attorney who refuses to comply with the Commissioner’s rules and regulations or who violates any provision of this 

section for which a penalty is prescribed. The Commissioner of Social Security may, by rule and regulation, prescribe the maximum 

fees which may be charged for services performed in connection 

with any claim before the Commissioner of Social Security under 

this title, and any agreement in violation of such rules and regulations shall be void. Except as provided in paragraph (2)(A), whenever the Commissioner of Social Security, in any claim before the 

Commissioner for benefits under this title, makes a determination 

favorable to the claimant, the Commissioner shall, if the claimant 

was represented by an attorney in connection with such claim, fix 

(in accordance with the regulations prescribed pursuant to the preVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00081 Fmt 6659 Sfmt 6601 E:\HR\OC\HR046.XXX HR046
82

ceding sentence) a reasonable fee to compensate such attorney for 

the services performed by him in connection with such claim. 

* * * * * * *

(d) ASSESSMENT ON ATTORNEYS.— (1) * * *

(2) AMOUNT.— (A) The amount of an assessment under paragraph (1) 

shall be equal to the product obtained by multiplying the 

amount of the representative’s fee that would be required 

to be so certified by subsection (a)(4) or (b)(1) before the 

application of this subsection, by the percentage specified 

in subparagraph (B), except that the maximum amount of the assessment may not exceed the greater of $75 or the adjusted amount as provided pursuant to the following two 

sentences. In the case of any calendar year beginning after 

the amendments made by section 301 of the Social Security 

Protection Act of 2003 take effect, the dollar amount specified in the preceding sentence (including a previously adjusted amount) shall be adjusted annually under the procedures used to adjust benefit amounts under section 

215(i)(2)(A)(ii), except such adjustment shall be based on 

the higher of $75 or the previously adjusted amount that 

would have been in effect for December of the preceding 

year, but for the rounding of such amount pursuant to the 

following sentence. Any amount so adjusted that is not a 

multiple of $1 shall be rounded to the next lowest multiple 

of $1, but in no case less than $75.

* * * * * * *

PENALTIES

SEC. 208. (a)***

(b)(1) Any Federal court, when sentencing a defendant convicted 

of an offense under subsection (a), may order, in addition to or in 

lieu of any other penalty authorized by law, that the defendant 

make restitution to the Social Security Administration. 

(2) Sections 3612, 3663, and 3664 of title 18, United States Code, 

shall apply with respect to the issuance and enforcement of orders 

of restitution under this subsection. In so applying such sections, the 

Social Security Administration shall be considered the victim. 

(3) If the court does not order restitution, or orders only partial 

restitution, under this subsection, the court shall state on the record 

the reasons therefor.

ø(b)¿ (c) Any person or other entity who is convicted of a violation of any of the provisions of this section, if such violation is committed by such person or entity in his role as, or in applying to become, a certified payee under section 205(j) on behalf of another individual (other than such person’s spouse), upon his second or any 

subsequent such conviction shall, in lieu of the penalty set forth in 

the preceding provisions of this section, be guilty of a felony and 

shall be fined under title 18, United States Code, or imprisoned for 

not more than five years, or both. In the case of any violation described in the preceding sentence, including a first such violation, 

if the court determines that such violation includes a willful misuse 

of funds by such person or entity, the court may also require that 

83

full or partial restitution of such funds be made to the individual 

for whom such person or entity was the certified payee. 

ø(c)¿ (d) Any individual or entity convicted of a felony under this 

section or under section 1632(b) may not be certified as a payee 

under section 205(j). For the purpose of subsection (a)(7), the terms 

‘‘social security number’’ and ‘‘social security account number’’ mean such numbers as are assigned by the Commissioner of Social 

Security under section 205(c)(2) whether or not, in actual use, such 

numbers are called social security numbers. 

ø(d)¿ (e)(1) Except as provided in paragraph (2), an alien— (A) * * *

* * * * * * *

DEFINITION OF WAGES

SEC. 209. (a) For the purposes of this title, the term ‘‘wages’’ means remuneration paid prior to 1951 which was wages for the 

purposes of this title under the law applicable to the payment of 

such remuneration, and remuneration paid after 1950 for employment, including the cash value of all remuneration (including benefits) paid in any medium other than cash; except that, in the case 

of remuneration paid after 1950, such term shall not include— (1) * * *

* * * * * * *

(6)(A)***

(B) Cash remuneration paid by an employer in any calendar 

year to an employee for domestic service in a private home of 

the employer (including domestic service ødescribed in section 

210(f)(5)¿ on a farm operated for profit), if the cash remuneration paid in such year by the employer to the employee for 

such service is less than the applicable dollar threshold (as defined in section 3121(x) of the Internal Revenue Code of 1986) 

for such year; 

* * * * * * *

DEFINITION OF EMPLOYMENT

SEC. 210. For the purposes of this title—

Employment 

(a) * * *

* * * * * * *

Agricultural Labor 

(f) The term ‘‘agricultural labor’’ includes all service performed—

(1) * * *

* * * * * * *

(5) On a farm operated for profit if such service is not in the 

course of the employer’s trade or business øor is domestic service in a private home of the employer¿. 

* * * * * * *

84

SELF-EMPLOYMENT

SEC. 211. For the purposes of this title—

Net Earnings From Self-Employment 

(a) The term ‘‘net earnings from self-employment’’ means the 

gross income, as computed under subtitle A of the Internal Revenue Code of 1986, derived by an individual from any trade or business carried on by such individual, less the deductions allowed 

under such subtitle which are attributable to such trade or business, plus his distributive share (whether or not distributed) of the 

ordinary net income or loss, as computed under section 702(a)(8) of 

such Code, from any trade or business carried on by a partnership 

of which he is a member; except that in computing such gross income and deductions and such distributive share of partnership ordinary net income or loss—

(1) * * *

* * * * * * *

(5)(A) If any of the income derived from a trade or business 

(other than a trade or business carried on by a partnership) is 

community income under community property laws applicable 

to such income, øall of the gross income and deductions attributable to such trade or business shall be treated as the gross 

income and deductions of the husband unless the wife exercises substantially all of the management and control of such 

trade or business, in which case all of such gross income and 

deductions shall be treated as the gross income and deductions 

of the wife;¿ the gross income and deductions attributable to 

such trade or business shall be treated as the gross income and 

deductions of the spouse carrying on such trade or business or, 

if such trade or business is jointly operated, treated as the gross 

income and deductions of each spouse on the basis of their respective distributive share of the gross income and deductions;

* * * * * * *

(7) An individual who is a duly ordained, commissioned, or 

licensed minister of a church or a member of a religious order 

shall compute his net earnings from self-employment derived 

from the performance of service described in subsection (c)(4) 

without regard to section 107 (relating to rental value of parsonages), section 119 (relating to meals and lodging furnished 

for the convenience of the employer), and section 911 (relating 

to earned income from sources without the United States) of 

the Internal Revenue Code of 1986, but shall not include in 

any such net earnings from self-employment the rental value of 

any parsonage or any parsonage allowance (whether or not excluded under section 107 of the Internal Revenue Code of 1986) 

provided after the individual retires, or any other retirement 

benefit received by such individual from a church plan (as defined in section 414(e) of such Code) after the individual retires; 

* * * * * * *

85

(15) The deduction under øsection 162(m)¿ section 162(l) (relating to health insurance costs of self-employed individuals) 

shall not be allowed. 

* * * * * * *

OTHER DEFINITIONS

SEC. 216. For the purposes of this title—

Spouse; Surviving Spouse 

(a) * * *

* * * * * * *

Widow 

(c)(1) The term ‘‘widow’’ (except when used in the first sentence 

of section 202(i)) means the surviving wife of an individual, but 

only if ø(1)¿ (A) she is the mother of his son or daughter, ø(2)¿ (B)

she legally adopted his son or daughter while she was married to 

him and while such son or daughter was under the age of eighteen, 

ø(3)¿ (C) he legally adopted her son or daughter while she was 

married to him and while such son or daughter was under the age 

of eighteen, ø(4)¿ (D) she was married to him at the time both of 

them legally adopted a child under the age of eighteen, ø(5)¿ (E) 

except as provided in paragraph (2), she was married to him for a 

period of not less than nine months immediately prior to the day 

on which he died, orø(6)¿ (F) in the month prior to the month of 

her marriage to him ø(A)¿ (i) she was entitled to, or on application 

therefor and attainment of age 62 in such prior month would have 

been entitled to, benefits under subsection (b), (e), or (h) of section 

202, ø(B)¿ (ii) she had attained age eighteen and was entitled to, 

or on application therefor would have been entitled to, benefits 

under subsection (d) of such section (subject, however, to section 

202(s)), or ø(C)¿ (iii) she was entitled to, or upon application therefor and attainment of the required age (if any) would have been entitled to, a widow’s, child’s (after attainment of age 18), or parent’s 

insurance annuity under section 2 of the Railroad Retirement Act 

of 1974, as amended.

(2) The requirements of paragraph (1)(E) in connection with the 

surviving wife of an individual shall be treated as satisfied if—

(A) the individual had been married prior to the individual’s 

marriage to the surviving wife, 

(B) the prior wife was institutionalized during the individual’s marriage to the prior wife due to mental incompetence or 

similar incapacity, 

(C) during the period of the prior wife’s institutionalization, 

the individual would have divorced the prior wife and married 

the surviving wife, but the individual did not do so because 

such divorce would have been unlawful, by reason of the prior 

wife’s institutionalization, under the laws of the State in which 

the individual was domiciled at the time (as determined based 

on evidence satisfactory to the Commissioner of Social Security), 

(D) the prior wife continued to remain institutionalized up to 

the time of her death, and 

86

(E) the individual married the surviving wife within 60 days 

after the prior wife’s death.

* * * * * * *

Widower 

(g)(1) The term ‘‘widower’’ (except when used in the first sentence 

of section 202(i)) means the surviving husband of an individual, but 

only if ø(1)¿ (A) he is the father of her son or daughter, ø(2)¿ (B)

he legally adopted her son or daughter while he was married to her 

and while such son or daughter was under the age of eighteen, 

ø(3)¿ (C) she legally adopted his son or daughter while he was married to her and while such son or daughter was under the age of 

eighteen, ø(4)¿ (D) he was married to her at the time both of them 

legally adopted a child under the age of eighteen, ø(5)¿ (E) except 

as provided in paragraph (2), married to her for a period of not less 

than nine months immediately prior to the day on which she died, 

or ø(6)¿ (F) in the month before the month of his marriage to her 

ø(A)¿ (i) he was entitled to, or on application therefor and attainment of age 62 in such prior month would have been entitled to, 

benefits under subsection (c), (f) or (h) of section 202, ø(B)¿ (ii) he 

had attained age eighteen and was entitled to, or on application 

therefor would have been entitled to, benefits under subsection (d) 

of such section (subject, however, to section 202(s)), or ø(C)¿ (iii) he 

was entitled to, or on application therefor and attainment of the required age (if any) he would have been entitled to, a widower’s, 

child’s (after attainment of age 18), or parent’s insurance annuity 

under section 2 of the Railroad Retirement Act of 1974, as amended.

(2) The requirements of paragraph (1)(E) in connection with the 

surviving husband of an individual shall be treated as satisfied if—

(A) the individual had been married prior to the individual’s 

marriage to the surviving husband, 

(B) the prior husband was institutionalized during the individual’s marriage to the prior husband due to mental incompetence or similar incapacity, 

(C) during the period of the prior husband’s institutionalization, the individual would have divorced the prior husband and 

married the surviving husband, but the individual did not do 

so because such divorce would have been unlawful, by reason 

of the prior husband’s institutionalization, under the laws of 

the State in which the individual was domiciled at the time (as 

determined based on evidence satisfactory to the Commissioner 

of Social Security), 

(D) the prior husband continued to remain institutionalized 

up to the time of his death, and 

(E) the individual married the surviving husband within 60 

days after the prior husband’s death.

* * * * * * *

87

Waiver of Nine-Month Requirement for Widow, Stepchild, or Widower in Case of Accidental Death or in Case of Serviceman Dying 

in Line of Duty, or in Case of Remarriage to the Same Individual 

(k) The requirement in øclause (5) of subsection (c) or clause (5) 

of subsection (g)¿ clause (E) of subsection (c)(1) or clause (E) of subsection (g)(1) that the surviving spouse of an individual have been 

married to such individual for a period of not less than nine 

months immediately prior to the day on which such individual died 

in order to qualify as such individual’s widow or widower, and the 

requirement in subsection (e) that the stepchild of a deceased individual have been such stepchild for not less than nine months immediately preceding the day on which such individual died in order 

to qualify as such individual’s child, shall be deemed to be satisfied, 

where such individual dies within the applicable nine-month period, if—

(1) * * *

* * * * * * *

VOLUNTARY AGREEMENTS FOR COVERAGE OF STATE AND LOCAL

EMPLOYEES

Purpose of Agreement 

SEC. 218. (a)***

* * * * * * *

Positions Covered By Retirement Systems 

(d)(1)***

* * * * * * *

(6)(A)***

* * * * * * *

(C) For the purposes of this subsection, any retirement system 

established by the State of Alaska, California, Connecticut, Florida, 

Georgia, Illinois, Kentucky, Massachusetts, Minnesota, Nevada, 

New Jersey, New Mexico, New York, North Dakota, Pennsylvania, 

Rhode Island, Tennessee, Texas, Vermont, Washington, Wisconsin, 

or Hawaii, or any political subdivision of any such State, which, on, 

before, or after the date of enactment of this subparagraph, is divided into two divisions or parts, one of which is composed of positions of members of such system who desire coverage under an 

agreement under this section and the other of which is composed 

of positions of members of such system who do not desire such coverage, shall, if the State so desires and if it is provided that there 

shall be included in such division or part composed of members desiring such coverage the positions of individuals who become members of such system after such coverage is extended, be deemed to 

be a separate retirement system with respect to each such division 

or part. If, in the case of a separate retirement system which is 

deemed to exist by reason of subparagraph (A) and which has been 

divided into two divisions or parts pursuant to the first sentence 

of this subparagraph, individuals become members of such system 

by reason of action taken by a political subdivision after coverage 

under an agreement under this section has been extended to the 

88

division or part thereof composed of positions of individuals who 

desire such coverage, the positions of such individuals who become 

members of such retirement system by reason of the action so 

taken shall be included in the division or part of such system composed of positions of members who do not desire such coverage if 

(i) such individuals, on the day before becoming such members, 

were in the division or part of another separate retirement system 

(deemed to exist by reason of subparagraph (A)) composed of positions of members of such system who do not desire coverage under 

an agreement under this section, and (ii) all of the positions in the 

separate retirement system of which such individuals so become 

members and all of the positions in the separate retirement system 

referred to in clause (i) would have been covered by a single retirement system if the State had not taken action to provide for separate retirement systems under this paragraph. 

* * * * * * *

REHABILITATION SERVICES

Referral for Rehabilitation Services 

SEC. 222. (a)***

* * * * * * *

Period of Trial Work 

(c)(1)***

* * * * * * *

(5) Upon conviction by a Federal court that an individual has 

fraudulently concealed work activity during a period of trial work 

from the Commissioner of Social Security by—

(A) providing false information to the Commissioner of Social 

Security as to whether the individual had earnings in or for a 

particular period, or as to the amount thereof; 

(B) receiving disability insurance benefits under this title 

while engaging in work activity under another identity, including under another social security account number or a number 

purporting to be a social security account number; or 

(C) taking other actions to conceal work activity with an intent fraudulently to secure payment in a greater amount than 

is due or when no payment is authorized, 

no benefit shall be payable to such individual under this title with 

respect to a period of disability for any month before such conviction 

during which the individual rendered services during the period of 

trial work with respect to which the fraudulently concealed work activity occurred, and amounts otherwise due under this title as restitution, penalties, assessments, fines, or other repayments shall in 

all cases be in addition to any amounts for which such individual 

is liable as overpayments by reason of such concealment.

* * * * * * *

DEMONSTRATION PROJECT AUTHORITY

SEC. 234. (a)***

* * * * * * *

89

(c) AUTHORITY TO WAIVE COMPLIANCE WITH BENEFITS REQUIRE- MENTS.—In the case of any experiment or demonstration project 

øconducted under subsection (a)¿ initiated under subsection (a) on 

or before December 17, 2004, the Commissioner may waive compliance with the benefit requirements of this title and the requirements of section 1148 as they relate to the program established 

under this title, and the Secretary may (upon the request of the 

Commissioner) waive compliance with the benefits requirements of 

title XVIII, insofar as is necessary for a thorough evaluation of the 

alternative methods under consideration. No such experiment or 

project shall be actually placed in operation unless at least 90 days 

prior thereto a written report, prepared for purposes of notification 

and information only and containing a full and complete description thereof, has been transmitted by the Commissioner to the 

Committee on Ways and Means of the House of Representatives 

and to the Committee on Finance of the Senate. Periodic reports 

on the progress of such experiments and demonstration projects 

shall be submitted by the Commissioner to such committees. When 

appropriate, such reports shall include detailed recommendations 

for changes in administration or law, or both, to carry out the objectives stated in subsection (a). 

(d) REPORTS.— (1) * * *

(2) TERMINATION AND FINAL REPORT.—øThe authority under 

the preceding provisions of this section (including any waiver 

granted pursuant to subsection (c)) shall terminate 5 years 

after the date of the enactment of this Act.¿ The authority to 

initiate projects under the preceding provisions of this section 

shall terminate on December 18, 2004. Not later than 90 days 

after the termination of any experiment or demonstration 

project carried out under this section, the Commissioner shall 

submit to the Committee on Ways and Means of the House of 

Representatives and to the Committee on Finance of the Senate a final report with respect to that experiment or demonstration project. 

* * * * * * *

TITLE VII—ADMINISTRATION 

* * * * * * *

SOCIAL SECURITY ADVISORY BOARD

Establishment of Board 

SEC. 703. (a)***

* * * * * * *

øExpenses and Per Diem 

ø(f) Members of the Board shall serve without compensation, except that, while serving on business of the Board away from their 

homes or regular places of business, members may be allowed travel expenses, including per diem in lieu of subsistence, as authorized 

by section 5703 of title 5, United States Code, for persons in the 

Government employed intermittently.¿

90

Compensation, Expenses, and Per Diem 

(f) A member of the Board shall, for each day (including traveltime) during which the member is attending meetings or conferences 

of the Board or otherwise engaged in the business of the Board, be 

compensated at the daily rate of basic pay for level IV of the Executive Schedule. While serving on business of the Board away from 

their homes or regular places of business, members may be allowed 

travel expenses, including per diem in lieu of subsistence, as authorized by section 5703 of title 5, United States Code, for persons in 

the Government employed intermittently.

* * * * * * *

ADMINISTRATIVE DUTIES OF THE COMMISSIONER

Personnel 

SEC. 704. (a)***

Budgetary Matters 

(b)(1)***

* * * * * * *

(3)(A) Except as provided in subparagraph (B), amounts received 

by the Social Security Administration pursuant to an order of restitution under section 208(b), 807(i), or 1632(b) shall be credited to 

a special fund established in the Treasury of the United States for 

amounts so received or recovered. The amounts so credited, to the 

extent and in the amounts provided in advance in appropriations 

Acts, shall be available to defray expenses incurred in carrying out 

titles II, VIII, and XVI. 

(B) Subparagraph (A) shall not apply with respect to amounts received in connection with misuse by a representative payee (within 

the meaning of sections 205(j), 807, and 1631(a)(2)) of funds paid 

as benefits under title II, VIII, or XVI. Such amounts received in 

connection with misuse of funds paid as benefits under title II shall 

be transferred to the Managing Trustee of the Federal Old-Age and 

Survivors Insurance Trust Fund or the Federal Disability Insurance 

Trust Fund, as determined appropriate by the Commissioner of Social Security, and such amounts shall be deposited by the Managing 

Trustee into such Trust Fund. All other such amounts shall be deposited by the Commissioner into the general fund of the Treasury 

as miscellaneous receipts.

* * * * * * *

TITLE VIII—SPECIAL BENEFITS FOR 

CERTAIN WORLD WAR II VETERANS 

* * * * * * *

SEC. 807. REPRESENTATIVE PAYEES. 

(a) IN GENERAL.—If the Commissioner of Social Security determines that the interest of any qualified individual under this title 

would be served thereby, payment of the qualified individual’s benefit under this title may be made, regardless of the legal comVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00090 Fmt 6659 Sfmt 6601 E:\HR\OC\HR046.XXX HR046
91

petency or incompetency of the qualified individual, either directly 

to the qualified individual, or øfor his or her benefit¿ for his or her 

use and benefit, to another person (the meaning of which term, for 

purposes of this section, includes an organization) with respect to 

whom the requirements of subsection (b) have been met (in this 

section referred to as the qualified individual’s ‘‘representative 

payee’’). If the Commissioner of Social Security determines that a 

representative payee has misused any benefit paid to the representative payee pursuant to this section, section 205( j), or section 

1631(a)(2), the Commissioner of Social Security shall promptly revoke the person’s designation as the qualified individual’s representative payee under this subsection, and shall make payment 

to an alternative representative payee or, if the interest of the 

qualified individual under this title would be served thereby, to the 

qualified individual. 

(b) EXAMINATION OF FITNESS OF PROSPECTIVE REPRESENTATIVE

PAYEE.—

(1) * * *

(2) As part of the investigation referred to in paragraph (1), 

the Commissioner of Social Security shall—

(A) * * *

* * * * * * *

(C) determine whether the person has been convicted of 

a violation of section 208, 811, or 1632; øand¿

(D) obtain information concerning whether such person 

has been convicted of any other offense under Federal or 

State law which resulted in imprisonment for more than 1 

year; 

(E) obtain information concerning whether such person is 

a person described in section 804(a)(2); and

ø(D)¿ (F) determine whether payment of benefits to the 

person in the capacity as representative payee has been revoked or terminated pursuant to this section, section 

205( j), or section 1631(a)(2)(A)(iii) by reason of misuse of 

funds paid as benefits under this title, title II, or XVI, respectively.

(3) Notwithstanding the provisions of section 552a of title 5, 

United States Code, or any other provision of Federal or State 

law (other than section 6103 of the Internal Revenue Code of 

1986 and section 1106(c) of this Act), the Commissioner shall 

furnish any Federal, State, or local law enforcement officer, 

upon the written request of the officer, with the current address, 

social security account number, and photograph (if applicable) 

of any person investigated under this subsection, if the officer 

furnishes the Commissioner with the name of such person and 

such other identifying information as may reasonably be required by the Commissioner to establish the unique identity of 

such person, and notifies the Commissioner that— (A) such person is described in section 804(a)(2), 

(B) such person has information that is necessary for the 

officer to conduct the officer’s official duties, and 

(C) the location or apprehension of such person is within 

the officer’s official duties.

* * * * * * *

92

(d) PERSONS INELIGIBLE TO SERVE AS REPRESENTATIVE PAYEES.— (1) IN GENERAL.—The benefits of a qualified individual may 

not be paid to any other person pursuant to this section if— (A) * * *

(B) except as provided in paragraph (2), payment of benefits to the person in the capacity of representative payee 

has been revoked or terminated under this section, section 

205( j), or section 1631(a)(2)(A)(ii) by reason of misuse of 

funds paid as benefits under this title, title II, or title XVI, 

respectively; øor¿

(C) except as provided in paragraph (2)(B), the person is 

a creditor of the qualified individual and provides the 

qualified individual with goods or services for 

considerationø.¿;

(D) such person has previously been convicted as described in subsection (b)(2)(D), unless the Commissioner determines that such payment would be appropriate notwithstanding such conviction; or 

(E) such person is a person described in section 804(a)(2).

* * * * * * *

(h) ACCOUNTABILITY MONITORING.—

(1) * * *

* * * * * * *

(3) AUTHORITY TO REDIRECT DELIVERY OF BENEFIT PAYMENTS

WHEN A REPRESENTATIVE PAYEE FAILS TO PROVIDE REQUIRED

ACCOUNTING.—In any case in which the person described in 

paragraph (1) or (2) receiving benefit payments on behalf of a 

qualified individual fails to submit a report required by the 

Commissioner of Social Security under paragraph (1) or (2), the 

Commissioner may, after furnishing notice to such person and 

the qualified individual, require that such person appear in 

person at a United States Government facility designated by the 

Social Security Administration as serving the area in which the 

qualified individual resides in order to receive such benefit payments.

ø(3)¿ (4) MAINTAINING LISTS OF PAYEES.—The Commissioner 

of Social Security shall maintain lists which shall be updated 

periodically of— (A) * * *

* * * * * * *

ø(4)¿ (5) MAINTAINING LISTS OF AGENCIES.—The Commissioner of Social Security shall maintain lists, which shall be 

updated periodically, of public agencies and community-based 

nonprofit social service agencies which are qualified to serve as 

representative payees pursuant to this section and which are 

located in the jurisdiction in which any qualified individual resides. 

(i) øRESTITUTION.—In any case where¿

(i) RESTITUTION.—

(1) IN GENERAL.—In any case where the negligent failure of 

the Commissioner of Social Security to investigate or monitor 

a representative payee results in misuse of benefits by the representative payee, the Commissioner of Social Security shall 

93

make payment to the qualified individual or the individual’s alternative representative payee of an amount equal to the misused benefits. In any case in which a representative payee 

that—

(A) is not an individual; or 

(B) is an individual who, for any month during a period 

when misuse occurs, serves 15 or more individuals who are 

beneficiaries under this title, title II, title XVI, or any combination of such titles;

misuses all or part of an individual’s benefit paid to such representative payee, the Commissioner of Social Security shall pay 

to the beneficiary or the beneficiary’s alternative representative 

payee an amount equal to the amount of such benefit so misused. The provisions of this paragraph are subject to the limitations of subsection (l)(2). The Commissioner of Social Security 

shall make a good faith effort to obtain restitution from the 

terminated representative payee.

(2) COURT ORDER FOR RESTITUTION.—

(A) IN GENERAL.—Any Federal court, when sentencing a 

defendant convicted of an offense under subsection (a), may 

order, in addition to or in lieu of any other penalty authorized by law, that the defendant make restitution to the Social Security Administration. 

(B) RELATED PROVISIONS.—Sections 3612, 3663, and 

3664 of title 18, United States Code, shall apply with respect to the issuance and enforcement of orders of restitution under this paragraph. In so applying such sections, the 

Social Security Administration shall be considered the victim. 

(C) STATED REASONS FOR NOT ORDERING RESTITUTION.—

If the court does not order restitution, or orders only partial 

restitution, under this paragraph, the court shall state on 

the record the reasons therefor. 

(j) MISUSE OF BENEFITS.—For purposes of this title, misuse of 

benefits by a representative payee occurs in any case in which the 

representative payee receives payment under this title for the use 

and benefit of another person under this title and converts such payment, or any part thereof, to a use other than for the use and benefit 

of such person. The Commissioner of Social Security may prescribe 

by regulation the meaning of the term ‘‘use and benefit’’ for purposes 

of this subsection. 

(k) PERIODIC ONSITE REVIEW.—(1) In addition to such other reviews of representative payees as the Commissioner of Social Security may otherwise conduct, the Commissioner may provide for the 

periodic onsite review of any person or agency that receives the benefits payable under this title (alone or in combination with benefits 

payable under title II or title XVI) to another individual pursuant 

to the appointment of such person or agency as a representative 

payee under this section, section 205(j), or section 1631(a)(2) in any 

case in which—

(A) the representative payee is a person who serves in that capacity with respect to 15 or more such individuals; or 

(B) the representative payee is an agency that serves in that 

capacity with respect to 50 or more such individuals. 

94

(2) Within 120 days after the end of each fiscal year, the Commissioner shall submit to the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the Senate a report on the results of periodic onsite reviews conducted during the fiscal year pursuant to paragraph (1) and of any other reviews of representative payees conducted during such fiscal year in 

connection with benefits under this title. Each such report shall describe in detail all problems identified in such reviews and any corrective action taken or planned to be taken to correct such problems, 

and shall include—

(A) the number of such reviews; 

(B) the results of such reviews; 

(C) the number of cases in which the representative payee was 

changed and why; 

(D) the number of cases involving the exercise of expedited, 

targeted oversight of the representative payee by the Commissioner conducted upon receipt of an allegation of misuse of 

funds, failure to pay a vendor, or a similar irregularity; 

(E) the number of cases discovered in which there was a misuse of funds; 

(F) how any such cases of misuse of funds were dealt with by 

the Commissioner; 

(G) the final disposition of such cases of misuse of funds, including any criminal penalties imposed; and 

(H) such other information as the Commissioner deems appropriate. 

(l) LIABILITY FOR MISUSED AMOUNTS.—

(1) IN GENERAL.—If the Commissioner of Social Security or a 

court of competent jurisdiction determines that a representative 

payee that is not a Federal, State, or local government agency 

has misused all or part of a qualified individual’s benefit that 

was paid to such representative payee under this section, the 

representative payee shall be liable for the amount misused, 

and such amount (to the extent not repaid by the representative 

payee) shall be treated as an overpayment of benefits under this 

title to the representative payee for all purposes of this Act and 

related laws pertaining to the recovery of such overpayments. Subject to paragraph (2), upon recovering all or any 

part of such amount, the Commissioner shall make payment of 

an amount equal to the recovered amount to such qualified individual or such qualified individual’s alternative representative payee. 

(2) LIMITATION.—The total of the amount paid to such individual or such individual’s alternative representative payee 

under paragraph (1) and the amount paid under subsection (i) 

may not exceed the total benefit amount misused by the representative payee with respect to such individual.

* * * * * * *

TITLE XI—GENERAL PROVISIONS, PEER REVIEW, AND 

ADMINISTRATIVE SIMPLIFICATION 

* * * * * * *

95

PART A—GENERAL PROVISIONS

* * * * * * *

SEC. 1129. CIVIL MONETARY PENALTIES AND ASSESSMENTS FOR TITLES II, VIII AND XVI. 

(a)(1) Any person (including an organization, agency, or other entity) øwho makes, or causes to be made, a statement or representation of a material fact for use in determining any initial or continuing right to or the amount of— ø(A) monthly insurance benefits under title II, 

ø(B) benefits or payments under title VIII, or 

ø(C) benefits or payments under title XVI, 

that the person knows or should know is false or misleading or 

knows or should know omits a material fact or makes such a statement with knowing disregard for the truth shall be subject to,¿

who—(A) makes, or causes to be made, a statement or representation of a material fact, for use in determining any initial or continuing right to or the amount of monthly insurance benefits 

under title II or benefits or payments under title VIII or XVI, 

that the person knows or should know is false or misleading, 

(B) makes such a statement or representation for such use 

with knowing disregard for the truth, or 

(C) omits from a statement or representation for such use, or 

otherwise withholds disclosure of, a fact which the person 

knows or should know is material to the determination of any 

initial or continuing right to or the amount of monthly insurance benefits under title II or benefits or payments under title 

VIII or XVI, if the person knows, or should know, that the statement or representation with such omission is false or misleading or that the withholding of such disclosure is misleading,

shall be subject to, in addition to any other penalties that may be prescribed by law, a civil money penalty of not more than $5,000 

for each such statement or representation or each receipt of such 

benefits or payments while withholding disclosure of such fact. Such 

person also shall be subject to an assessment, in lieu of damages 

sustained by the United States because of such statement or representation or because of such withholding of disclosure of a material fact, of not more than twice the amount of benefits or payments paid as a result of such a statement or representation or 

such a withholding of disclosure. In addition, the Commissioner of 

Social Security may make a determination in the same proceeding 

to recommend that the Secretary exclude, as provided in section 

1128, such a person who is a medical provider or physician from 

participation in the programs under title XVIII. 

* * * * * * *

(3) Any person (including an organization, agency, or other entity) 

who, having received, while acting in the capacity of a representative payee pursuant to section 205(j), 807, or 1631(a)(2), a payment 

under title II, VIII, or XVI for the use and benefit of another individual, converts such payment, or any part thereof, to a use that 

such person knows or should know is other than for the use and 

benefit of such other individual shall be subject to, in addition to 

any other penalties that may be prescribed by law, a civil money 

96

penalty of not more than $5,000 for each such conversion. Such person shall also be subject to an assessment, in lieu of damages sustained by the United States resulting from the conversion, of not 

more than twice the amount of any payments so converted.

(b)(1)***

* * * * * * *

(3) In a proceeding under this section which— (A) is against a person who has been convicted (whether 

upon a verdict after trial or upon a plea of guilty or nolo 

contendere) of a Federal or State crime øcharging fraud or 

false statements¿; and 

* * * * * * *

(c) In determining pursuant to subsection (a) the amount or 

scope of any penalty or assessment, or whether to recommend and 

exclusion, the Commissioner of Social Security shall take into account—

(1) the nature of the statements øand representations¿, representations, or actions referred to in subsection (a) and the circumstances under which they occurred; 

* * * * * * *

(e)(1) Civil money penalties and assessments imposed under this 

section may be compromised by the Commissioner of Social Security and may be recovered— (A) in a civil action in the name of the United States brought 

in United States district court for the district where the østatement or representation referred to in subsection (a) was made¿

violation occurred, or where the person resides, as determined 

by the Commissioner of Social Security; 

* * * * * * *

(2) Amounts recovered under this section shall be recovered 

under by the Commissioner of Social Security and shall be disposed 

of as follows: 

(A) * * *

(B) øIn the case of amounts recovered arising out of a determination relating to title VIII or XVI,¿ In the case of any other 

amounts recovered under this section, the amounts shall be deposited by the Commissioner of Social Security into the general 

fund of the Treasury as miscellaneous receipts. 

* * * * * * *

SEC. 1129A. ADMINISTRATIVE PROCEDURE FOR IMPOSING PENALTIES 

FOR FALSE OR MISLEADING STATEMENTS. 

(a) IN GENERAL.—Any person øwho makes, or causes to be made, 

a statement or representation of a material fact for use in determining any initial or continuing right to or the amount of—

ø(1) monthly insurance benefits under title II; or 

ø(2) benefits or payments under title XVI, 

that the person knows or should know is false or misleading or 

knows or should know omits a material fact or who makes such a 

statement with knowing disregard for the truth shall be subject 

to,¿ who—

(1) makes, or causes to be made, a statement or representation of a material fact, for use in determining any initial or conVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00096 Fmt 6659 Sfmt 6603 E:\HR\OC\HR046.XXX HR046
97

tinuing right to or the amount of monthly insurance benefits 

under title II or benefits or payments under title XVI that the 

person knows or should know is false or misleading, 

(2) makes such a statement or representation for such use 

with knowing disregard for the truth, or 

(3) omits from a statement or representation for such use, or 

otherwise withholds disclosure of, a fact which the person 

knows or should know is material to the determination of any 

initial or continuing right to or the amount of monthly insurance benefits under title II or benefits or payments under title 

XVI, if the person knows, or should know, that the statement 

or representation with such omission is false or misleading or 

that the withholding of such disclosure is misleading,

shall be subject to, in addition to any other penalties that may be 

prescribed by law, a penalty described in subsection (b) to be imposed by the Commissioner of Social Security. 

* * * * * * *

ATTEMPTS TO INTERFERE WITH ADMINISTRATION OF SOCIAL SECURITY

ACT

SEC. 1129B. Whoever corruptly or by force or threats of force (including any threatening letter or communication) attempts to intimidate or impede any officer, employee, or contractor of the Social 

Security Administration (including any State employee of a disability determination service or any other individual designated by 

the Commissioner of Social Security) acting in an official capacity 

to carry out a duty under this Act, or in any other way corruptly 

or by force or threats of force (including any threatening letter or 

communication) obstructs or impedes, or attempts to obstruct or impede, the due administration of this Act, shall be fined not more 

than $5,000, imprisoned not more than 3 years, or both, except that 

if the offense is committed only by threats of force, the person shall 

be fined not more than $3,000, imprisoned not more than 1 year, 

or both. In this subsection, the term ‘‘threats of force’’ means threats 

of harm to the officer or employee of the United States or to a contractor of the Social Security Administration, or to a member of the 

family of such an officer or employee or contractor.

* * * * * * *

øPROHIBITION OF MISUSE OF SYMBOLS, EMBLEMS, OR NAMES IN REF- ERENCE¿ PROHIBITIONS RELATING TO REFERENCES TO SOCIAL SE- CURITY OR MEDICARE

SEC. 1140. (a)(1) No person may use, in connection with any item 

constituting an advertisement, solicitation, circular, book, pamphlet, or other communication, or a play, motion picture, broadcast, 

telecast, or other production, alone or with other words, letters, 

symbols, or emblems— (A) the words ‘‘Social Security’’, ‘‘Social Security Account’’, ‘‘Social Security System’’, ‘‘Social Security Administration’’, 

‘‘Medicare’’, ‘‘Health Care Financing Administration’’, ‘‘Centers 

for Medicare & Medicaid Services’’, ‘‘Department of Health and 

Human Services’’, ‘‘Health and Human Services’’, ‘‘Supplemental Security Income Program’’, øor ‘‘Medicaid’’,¿ ‘‘Medicaid’’, ‘‘Death Benefits Update’’, ‘‘Federal Benefit Information’’, 

98

‘‘Funeral Expenses’’, or ‘‘Final Supplemental Plan’’, the letters 

‘‘SSA’’, ‘‘HCFA’’, ‘‘CMS’’, ‘‘DHHS’’, ‘‘HHS’’, or ‘‘SSI’’, or any 

other combination or variation of such words or letters, or 

(B) a symbol or emblem of the Social Security Administration, Health Care Financing Administration, Centers for Medicare & Medicaid Services, or Department of Health and 

Human Services (including the design of, or a reasonable facsimile of the design of, the social security card issued pursuant 

to section 205(c)(2)(F), or the Medicare card the check used for 

payment of benefits under title II, or envelopes or other stationery used by the Social Security Administration, Health 

Care Financing Administration, Centers for Medicare & Medicaid Services, or Department of Health and Human Services) 

or any other combination or variation of such symbols or emblems, 

in a manner which such person knows or should know would convey, or in a manner which reasonably could be interpreted or construed as conveying, the false impression that such item is approved, endorsed, or authorized by the Social Security Administration, øthe Health Care Financing Administration,¿ the Centers for 

Medicare & Medicaid Services, or the Department of Health and 

Human Services or that such person has some connection with, or 

authorization from, the Social Security Administration, øthe Health 

Care Financing Administration,¿ the Centers for Medicare & Medicaid Services, or the Department of Health and Human Services. 

The preceding provisions of this subsection shall not apply with respect to the use by any agency or instrumentality of a State or political subdivision of a State of any words or letters which identify 

an agency or instrumentality of such State or of a political subdivision of such State or the use by any such agency or instrumentality 

of any symbol or emblem of an agency or instrumentality of such 

State or a political subdivision of such State. 

* * * * * * *

(4)(A) No person shall offer, for a fee, to assist an individual to 

obtain a product or service that the person knows or should know 

is provided free of charge by the Social Security Administration unless, at the time the offer is made, the person provides to the individual to whom the offer is tendered a notice that—

(i) explains that the product or service is available free of 

charge from the Social Security Administration, and 

(ii) complies with standards prescribed by the Commissioner 

of Social Security respecting the content of such notice and its 

placement, visibility, and legibility. 

(B) Subparagraph (A) shall not apply to any offer—

(i) to serve as a claimant representative in connection with a 

claim arising under title II, title VIII, or title XVI; or 

(ii) to prepare, or assist in the preparation of, an individual’s 

plan for achieving self-support under title XVI.

* * * * * * *

99

SOCIAL SECURITY ACCOUNT STATEMENTS

Provision Upon Request 

SEC. 1143. (a)(1) Beginning not later than October 1, 1990, the 

øSecretary¿ Commissioner of Social Security shall provide upon the 

request of an eligible individual a social security account statement 

(hereinafter referred to as the ‘‘statement’’). 

(2) Each statement shall contain—

(A) the amount of wages paid to and self-employment income 

derived by the eligible individual as shown by the records of 

the øSecretary¿ Commissioner at the date of the request; 

(B) an estimate of the aggregate of the employer, employee, 

and self-employment contributions of the eligible individual for 

old-age, survivors, and disability insurance as shown by the 

records of the øSecretary¿ Commissioner on the date of the request; 

(C) a separate estimate of the aggregate of the employer, employee, and self-employment contributions of the eligible individual for hospital insurance as shown by the records of the 

øSecretary¿ Commissioner on the date of the request; and 

* * * * * * *

Notice to Eligible Individuals 

(b) The øSecretary¿ Commissioner shall, to the maximum extent 

practicable, take such steps as are necessary to assure that eligible 

individuals are informed of the availability of the statement described in subsection (a). 

Mandatory Provision of Statements 

(c)(1) By not later than September 30, 1995, the øSecretary¿

Commissioner shall provide a statement to each eligible individual 

who has attained age 60 by October 1, 1994, and who is not receiving benefits under title II and for whom a current mailing address 

can be determined through such methods as the øSecretary¿ Commissioner determines to be appropriate. In fiscal years 1995 

through 1999 the øSecretary¿ Commissioner shall provide a statement to each eligible individual who attains age 60 in such fiscal 

years and who is not receiving benefits under title II and for whom 

a current mailing address can be determined through such methods 

as the øSecretary¿ Commissioner determines to be appropriate. 

The øSecretary¿ Commissioner shall provide with each statement 

to an eligible individual notice that such statement is updated annually and is available upon request. 

(2) Beginning not later than October 1, 1999, the øSecretary¿

Commissioner shall provide a statement on an annual basis to each 

eligible individual who is not receiving benefits under title II and 

for whom a mailing address can be determined through such methods as the øSecretary¿ Commissioner determines to be appropriate. 

With respect to statements provided to eligible individuals who 

have not attained age 50, such statements need not include estimates of monthly retirement benefits. However, if such statements 

provided to eligible individuals who have not attained age 50 do 

not include estimates of retirement benefit amounts, such stateVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00099 Fmt 6659 Sfmt 6601 E:\HR\OC\HR046.XXX HR046
100

ments shall include a description of the benefits (including auxiliary benefits) that are available upon retirement. 

* * * * * * *

THE TICKET TO WORK AND SELF-SUFFICIENCY PROGRAM

SEC. 1148. (a)***

* * * * * * *

(g) INDIVIDUAL WORK PLANS.—

(1) REQUIREMENTS.—Each employment network shall—

(A) * * *

* * * * * * *

An individual work plan established pursuant to this subsection shall be treated, for purposes of section 51(d)(6)(B)(i) of 

the Internal Revenue Code of 1986, as an individualized written plan for employment under a State plan for vocational rehabilitation services approved under the Rehabilitation Act of 

1973.

* * * * * * *

WORK INCENTIVES OUTREACH PROGRAM

SEC. 1149. (a)***

* * * * * * *

(c) DEFINITIONS.—In this section: 

(1) * * *

ø(2) DISABLED BENEFICIARY.—The term ‘‘disabled beneficiary’’ has the meaning given that term in section 

1148(k)(2).¿

(2) DISABLED BENEFICIARY.—The term ‘‘disabled beneficiary’’ means an individual— (A) who is a disabled beneficiary as defined in section 

1148(k)(2) of this Act; 

(B) who is receiving a cash payment described in section 

1616(a) of this Act or a supplementary payment described 

in section 212(a)(3) of Public Law 93–66 (without regard to 

whether such payment is paid by the Commissioner pursuant to an agreement under section 1616(a) of this Act or 

under section 212(b) of Public Law 93–66); 

(C) who, pursuant to section 1619(b) of this Act, is considered to be receiving benefits under title XVI of this Act; 

or 

(D) who is entitled to benefits under part A of title XVIII 

of this Act by reason of the penultimate sentence of section 

226(b) of this Act.

* * * * * * *

STATE GRANTS FOR WORK INCENTIVES ASSISTANCE TO DISABLED

BENEFICIARIES

SEC. 1150. (a)***

(b) SERVICES PROVIDED.—Services provided to disabled beneficiaries pursuant to a payment made under this section may include—

101

(1) * * *

(2) advocacy or other services that a disabled beneficiary 

may need to øsecure or regain¿ secure, maintain, or regain

gainful employment. 

* * * * * * *

(g) DEFINITIONS.—In this section: 

(1) * * *

ø(2) DISABLED BENEFICIARY.—The term ‘‘disabled beneficiary’’ has the meaning given that term in section 

1148(k)(2).¿

(2) DISABLED BENEFICIARY.—The term ‘‘disabled beneficiary’’ means an individual— (A) who is a disabled beneficiary as defined in section 

1148(k)(2) of this Act; 

(B) who is receiving a cash payment described in section 

1616(a) of this Act or a supplementary payment described 

in section 212(a)(3) of Public Law 93–66 (without regard to 

whether such payment is paid by the Commissioner pursuant to an agreement under section 1616(a) of this Act or 

under section 212(b) of Public Law 93–66); 

(C) who, pursuant to section 1619(b) of this Act, is considered to be receiving benefits under title XVI of this Act; 

or 

(D) who is entitled to benefits under part A of title XVIII 

of this Act by reason of the penultimate sentence of section 

226(b) of this Act.

* * * * * * *

TITLE XVI—SUPPLEMENTAL SECURITY INCOME FOR THE 

AGED, BLIND, AND DISABLED 

* * * * * * *

PART A—DETERMINATION OF BENEFITS

* * * * * * *

RESOURCES

Exclusions From Resources 

SEC. 1613. (a) In determining the resources of an individual (and 

his eligible spouse, if any) there shall be excluded—

(1) * * *

* * * * * * *

(12) any account, including accrued interest or other earnings thereon, established and maintained in accordance with 

section 1631(a)(2)(F); øand¿

(13) any gift to, or for the benefit of, an individual who has 

not attained 18 years of age and who has a life-threatening 

condition, from an organization described in section 501(c)(3) of 

the Internal Revenue Code of 1986 which is exempt from taxation under section 501(a) of such Code—

(A) * * *

(B) in the case of a cash gift, only to the extent that the 

total amount excluded from the resources of the individual 

102

pursuant to this paragraph in the calendar year in which 

the gift is made does not exceed $2,000ø.¿; and

(14) for the 9-month period beginning after the month in 

which received, any amount received by such individual (or 

spouse) or any other person whose income is deemed to be included in such individual’s (or spouse’s) income for purposes of 

this title as restitution for benefits under this title, title II, or 

title VIII that a representative payee of such individual (or 

spouse) or such other person under section 205(j), 807, or 

1631(a)(2) has misused.

* * * * * * *

PART B—PROCEDURAL AND GENERAL PROVISIONS

PAYMENTS AND PROCEDURES

Payment of Benefits 

SEC. 1631. (a)(1)***

(2)(A)(i)***

(iv) For purposes of this paragraph, misuse of benefits by a representative payee occurs in any case in which the representative 

payee receives payment under this title for the use and benefit of another person and converts such payment, or any part thereof, to a 

use other than for the use and benefit of such other person. The 

Commissioner of Social Security may prescribe by regulation the 

meaning of the term ‘‘use and benefit’’ for purposes of this clause.

(B)(i)***

(ii) As part of the investigation referred to in clause (i)(I), the 

Commissioner of Social Security shall—

(I) * * *

* * * * * * *

(III) determine whether such person has been convicted of a 

violation of section 208, 811, or 1632; øand¿

(IV) obtain information concerning whether the person has 

been convicted of any other offense under Federal or State law 

which resulted in imprisonment for more than 1 year; 

(V) obtain information concerning whether such person is a 

person described in section 1611(e)(4)(A); and

ø(IV)¿ (VI) determine whether payment of benefits to such 

person has been terminated pursuant to subparagraph (A)(iii), 

whether the designation of such person as a representative 

payee has been revoked pursuant to section 807(a), and whether certification of payment of benefits to such person has been 

revoked pursuant to section 205(j), by reason of misuse of 

funds paid as benefits under title II, title VIII, or this title. 

(iii) Benefits of an individual may not be paid to any other person pursuant to subparagraph (A)(ii) if—

(I) * * *

(II) except as provided in clause (iv), payment of benefits to 

such person pursuant to subparagraph (A)(ii) has previously 

been terminated as described in øclause (ii)(IV)¿ clause (ii)(VI), 

the designation of such person as a representative payee has 

been revoked pursuant to section 807(a), or certification of payment of benefits to such person under section 205(j) has preVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00102 Fmt 6659 Sfmt 6601 E:\HR\OC\HR046.XXX HR046
103

viously been revoked as described in øsection 

205(j)(2)(B)(i)(IV)¿ section 205(j)(2)(B)(i)(VI); øor¿

(III) except as provided in clause (v), such person is a creditor of such individual who provides such individual with goods 

or services for considerationø.¿;

(IV) the person has previously been convicted as described in 

clause (ii)(IV) of this subparagraph, unless the Commissioner 

determines that the payment would be appropriate notwithstanding the conviction; or 

(V) such person is a person described in section 1611(e)(4)(A).

* * * * * * *

(vii) In the case of an individual described in subparagraph 

(A)(ii)(II), when selecting such individual’s representative payee, 

preference shall be given to—

(I) øa community-based nonprofit social service agency 

licensed or bonded by the State¿ a certified communitybased nonprofit social service agency (as defined in subparagraph (I)); 

* * * * * * *

(xiv) Notwithstanding the provisions of section 552a of title 5, 

United States Code, or any other provision of Federal or State law 

(other than section 6103 of the Internal Revenue Code of 1986 and 

section 1106(c) of this Act), the Commissioner shall furnish any 

Federal, State, or local law enforcement officer, upon the written request of the officer, with the current address, social security account 

number, and photograph (if applicable) of any person investigated 

under this subparagraph, if the officer furnishes the Commissioner 

with the name of such person and such other identifying information as may reasonably be required by the Commissioner to establish the unique identity of such person, and notifies the Commissioner that— (I) such person is described in section 1611(e)(4)(A), 

(II) such person has information that is necessary for the officer to conduct the officer’s official duties, and 

(III) the location or apprehension of such person is within the 

officer’s official duties.

(C)(i)***

* * * * * * *

(v) In any case in which the person described in clause (i) or (iv) 

receiving payments on behalf of another fails to submit a report required by the Commissioner of Social Security under clause (i) or 

(iv), the Commissioner may, after furnishing notice to the person 

and the individual entitled to the payment, require that such person 

appear in person at a field office of the Social Security Administration serving the area in which the individual resides in order to receive such payments.

(D)(i) øA¿ Except as provided in the next sentence, a qualified organization may collect from an individual a monthly fee for expenses (including overhead) incurred by such organization in providing services performed as such individual’s representative payee 

pursuant to subparagraph (A)(ii) if the fee does not exceed the lesser of—

104

(I) * * *

* * * * * * *

øThe Commissioner¿ A qualified organization may not collect a fee 

from an individual for any month with respect to which the Commissioner of Social Security or a court of competent jurisdiction has 

determined that the organization misused all or part of the individual’s benefit, and any amount so collected by the qualified organization for such month shall be treated as a misused part of the individual’s benefit for purposes of subparagraphs (E) and (F). The 

Commissioner of Social Security shall adjust annually (after 1995) 

each dollar amount set forth in subclause (II) of this clause under 

procedures providing for adjustments in the same manner and to 

the same extent as adjustments are provided for under the procedures used to adjust benefit amounts under section 215(i)(2)(A), except that any amount so adjusted that is not a multiple of $1.00 

shall be rounded to the nearest multiple of $1.00. Any agreement 

providing for a fee in excess of the amount permitted under this 

clause shall be void and shall be treated as misuse by the organization of such individual’s benefits. 

(ii) For purposes of this subparagraph, the term ‘‘qualified organization’’ means any State or local government agency whose mission is to carry out income maintenance, social service, or health 

care-related activities, any State or local government agency with 

fiduciary responsibilities, øor any community-based nonprofit social 

service agency, which—

ø(I) is bonded or licensed in each State in which the agency 

serves as a representative payee; and 

ø(II) in accordance¿ or any certified community-based nonprofit social service agency (as defined in subparagraph (I)), if 

the agency, in accordance with any applicable regulations of 

the Commissioner of Social Security— ø(aa)¿ (I) regularly provides services as a representative 

payee pursuant to subparagraph (A)(ii) or section 205(j)(4) or 

807 concurrently to 5 or more individuals; and 

ø(bb)¿ (II) demonstrates to the satisfaction of the Commissioner of Social Security that such agency is not otherwise a 

creditor of any such individual. 

The Commissioner of Social Security shall prescribe regulations 

under which the Commissioner of Social Security may grant an exception from øsubclause (II)(bb)¿ subclause (II) for any individual 

on a case-by-case basis if such exception is in the best interests of 

such individual. 

* * * * * * *

(E) RESTITUTION.—In cases where the negligent failure of the 

Commissioner of Social Security to investigate or monitor a representative payee results in misuse of benefits by the representative payee, the Commissioner of Social Security shall make payment to the beneficiary or the beneficiary’s representative payee of 

an amount equal to such misused benefits. In any case in which a 

representative payee that—

(i) is not an individual (regardless of whether it is a ‘‘qualified organization’’ within the meaning of subparagraph (D)(ii)); 

or 

105

(ii) is an individual who, for any month during a period 

when misuse occurs, serves 15 or more individuals who are 

beneficiaries under this title, title II, title VIII, or any combination of such titles;

misuses all or part of an individual’s benefit paid to the representative payee, the Commissioner of Social Security shall pay to the beneficiary or the beneficiary’s alternative representative payee an 

amount equal to the amount of the benefit so misused. The provisions of this subparagraph are subject to the limitations of subparagraph (H)(ii). The Commissioner of Social Security shall make a 

good faith effort to obtain restitution from the terminated representative payee. 

* * * * * * *

ø(G) The Commissioner of Social Security shall include as a part 

of the annual report required under section 704 information with 

respect to the implementation of the preceding provisions of this 

paragraph, including— ø(i) the number of cases in which the representative payee 

was changed; 

ø(ii) the number of cases discovered where there has been a 

misuse of funds; 

ø(iii) how any such cases were dealt with by the Commissioner of Social Security; 

ø(iv) the final disposition of such cases (including any criminal penalties imposed); and 

ø(v) such other information as the Commissioner of Social 

Security determines to be appropriate. 

ø(H) The Commissioner of Social Security shall make an initial 

report to each House of the Congress on the implementation of subparagraphs (B) and (C) within 270 days after the date of the enactment of this subparagraph. The Commissioner of Social Security 

shall include in the annual report required under section 704, information with respect to the implementation of subparagraphs (B) 

and (C), including the same factors as are required to be included 

in the Commissioner’s report under section 205(j)(4)(B).¿

(G)(i) In addition to such other reviews of representative payees as 

the Commissioner of Social Security may otherwise conduct, the 

Commissioner shall provide for the periodic onsite review of any 

person or agency that receives the benefits payable under this title 

(alone or in combination with benefits payable under title II or title 

VIII) to another individual pursuant to the appointment of the person or agency as a representative payee under this paragraph, section 205(j), or section 807 in any case in which— (I) the representative payee is a person who serves in that capacity with respect to 15 or more such individuals; 

(II) the representative payee is a certified community-based 

nonprofit social service agency (as defined in subparagraph (I) 

of this paragraph or section 205(j)(10)); or 

(III) the representative payee is an agency (other than an 

agency described in subclause (II)) that serves in that capacity 

with respect to 50 or more such individuals. 

(ii) Within 120 days after the end of each fiscal year, the Commissioner shall submit to the Committee on Ways and Means of the 

House of Representatives and the Committee on Finance of the Senate a report on the results of periodic onsite reviews conducted durVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00105 Fmt 6659 Sfmt 6603 E:\HR\OC\HR046.XXX HR046
106

ing the fiscal year pursuant to clause (i) and of any other reviews 

of representative payees conducted during such fiscal year in connection with benefits under this title. Each such report shall describe in detail all problems identified in the reviews and any corrective action taken or planned to be taken to correct the problems, 

and shall include—

(I) the number of the reviews; 

(II) the results of such reviews; 

(III) the number of cases in which the representative payee 

was changed and why; 

(IV) the number of cases involving the exercise of expedited, 

targeted oversight of the representative payee by the Commissioner conducted upon receipt of an allegation of misuse of 

funds, failure to pay a vendor, or a similar irregularity; 

(V) the number of cases discovered in which there was a misuse of funds; 

(VI) how any such cases of misuse of funds were dealt with 

by the Commissioner; 

(VII) the final disposition of such cases of misuse of funds, including any criminal penalties imposed; and 

(VIII) such other information as the Commissioner deems appropriate. 

(H)(i) If the Commissioner of Social Security or a court of competent jurisdiction determines that a representative payee that is not 

a Federal, State, or local government agency has misused all or part 

of an individual’s benefit that was paid to the representative payee 

under this paragraph, the representative payee shall be liable for 

the amount misused, and the amount (to the extent not repaid by 

the representative payee) shall be treated as an overpayment of benefits under this title to the representative payee for all purposes of 

this Act and related laws pertaining to the recovery of the overpayments. Subject to clause (ii), upon recovering all or any part of the 

amount, the Commissioner shall make payment of an amount equal 

to the recovered amount to such individual or such individual’s alternative representative payee. 

(ii) The total of the amount paid to such individual or such individual’s alternative representative payee under clause (i) and the 

amount paid under subparagraph (E) may not exceed the total benefit amount misused by the representative payee with respect to such 

individual. 

(I) For purposes of this paragraph, the term ‘‘certified communitybased nonprofit social service agency’’ means a community-based 

nonprofit social service agency which is in compliance with requirements, under regulations which shall be prescribed by the Commissioner, for annual certification to the Commissioner that it is bonded in accordance with requirements specified by the Commissioner 

and that it is licensed in each State in which it serves as a representative payee (if licensing is available in the State) in accordance with requirements specified by the Commissioner. Any such 

annual certification shall include a copy of any independent audit 

on the agency which may have been performed since the previous 

certification.

* * * * * * *

107

Procedures; Prohibitions of Assignments; Representation of 

Claimants 

(d)(1)***

(2)(A) The provisions of section 206ø(a) (other than paragraph (4) 

thereof)¿ (other than subsections (a)(4) and (d) thereof) shall apply 

to this part to the same extent as they apply in the case of title 

II, except that øparagraph (2) thereof¿ such section shall be applied—

(i) by substituting, øin subparagraphs (A)(ii)(I) and (C)(i),¿ in 

subparagraphs (A)(ii)(I) and (D)(i) of subsection (a)(2) the 

phrase ‘‘(as determined before any applicable reduction under 

section 1631(g), and reduced by the amount of any reduction 

in benefits under this title or title II made pursuant to section 

1127(a))’’ for the parenthetical phrase contained therein; øand 

ø(ii) by substituting ‘‘section 1631(a)(7)(A) or the requirements of due process of law’’ for ‘‘subsection (g) or (h) of section 

223’’. 

ø(B) The Commissioner of Social Security shall notify each claimant in writing, together with the notice to such claimant of an adverse determination, of the options for obtaining attorneys to represent individuals in presenting their cases before the Commissioner of Social Security. Such notification shall also advise the 

claimant of the availability to qualifying claimants of legal services 

organizations which provide legal services free of charge.¿

(ii) by substituting, in subsections (a)(2)(B) and (b)(1)(B)(i), 

the phrase ‘‘section 1631(a)(7)(A) or the requirements of due 

process of law’’ for the phrase ‘‘subsection (g) or (h) of section 

223’’; 

(iii) by substituting, in subsection (a)(2)(C)(i), the phrase 

‘‘under title II’’ for the phrase ‘‘under title XVI’’; 

(iv) by substituting, in subsection (b)(1)(A), the phrase ‘‘pay 

the amount of such fee’’ for the phrase ‘‘certify the amount of 

such fee for payment’’ and by striking, in subsection (b)(1)(A), 

the phrase ‘‘or certified for payment’’; and 

(v) by substituting, in subsection (b)(1)(B)(ii), the phrase 

‘‘deemed to be such amounts as determined before any applicable reduction under section 1631(g), and reduced by the amount 

of any reduction in benefits under this title or title II made pursuant to section 1127(a)’’ for the phrase ‘‘determined before any 

applicable reduction under section 1127(a))’’. 

(B) Subject to subparagraph (C), if the claimant is determined to 

be entitled to past-due benefits under this title and the person representing the claimant is an attorney, the Commissioner of Social 

Security shall pay out of such past-due benefits to such attorney an 

amount equal to the lesser of—

(i) so much of the maximum fee as does not exceed 25 percent 

of such past-due benefits (as determined before any applicable 

reduction under section 1631(g) and reduced by the amount of 

any reduction in benefits under this title or title II pursuant to 

section 1127(a)), or 

(ii) the amount of past-due benefits available after any applicable reductions under sections 1631(g) and 1127(a). 

(C)(i) Whenever a fee for services is required to be paid to an attorney from a claimant’s past-due benefits pursuant to subparaVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00107 Fmt 6659 Sfmt 6603 E:\HR\OC\HR046.XXX HR046
108

graph (B), the Commissioner shall impose on the attorney an assessment calculated in accordance with clause (ii). 

(ii)(I) The amount of an assessment under clause (i) shall be equal 

to the product obtained by multiplying the amount of the representative’s fee that would be required to be paid by subparagraph (B) 

before the application of this subparagraph, by the percentage specified in subclause (II), except that the maximum amount of the assessment may not exceed $75. In the case of any calendar year beginning after the amendments made by section 302 of the Social Security Protection Act of 2003 take effect, the dollar amount specified 

in the preceding sentence (including a previously adjusted amount) 

shall be adjusted annually under the procedures used to adjust benefit amounts under section 215(i)(2)(A)(ii), except such adjustment 

shall be based on the higher of $75 or the previously adjusted 

amount that would have been in effect for December of the preceding 

year, but for the rounding of such amount pursuant to the following 

sentence. Any amount so adjusted that is not a multiple of $1 shall 

be rounded to the next lowest multiple of $1, but in no case less 

than $75. 

(II) The percentage specified in this subclause is such percentage 

rate as the Commissioner determines is necessary in order to 

achieve full recovery of the costs of determining and approving fees 

to attorneys from the past-due benefits of claimants, but not in excess of 6.3 percent. 

(iii) The Commissioner may collect the assessment imposed on an 

attorney under clause (i) by offset from the amount of the fee otherwise required by subparagraph (B) to be paid to the attorney from 

a claimant’s past-due benefits. 

(iv) An attorney subject to an assessment under clause (i) may not, 

directly or indirectly, request or otherwise obtain reimbursement for 

such assessment from the claimant whose claim gave rise to the assessment. 

(v) Assessments on attorneys collected under this subparagraph 

shall be deposited in the Treasury in a separate fund created for 

this purpose. 

(vi) The assessments authorized under this subparagraph shall be 

collected and available for obligation only to the extent and in the 

amount provided in advance in appropriations Acts. Amounts so 

appropriated are authorized to remain available until expended, for 

administrative expenses in carrying out this title and related laws.

* * * * * * *

PENALTIES FOR FRAUD

SEC. 1632. (a)***

(b)(1) Any Federal court, when sentencing a defendant convicted 

of an offense under subsection (a), may order, in addition to or in 

lieu of any other penalty authorized by law, that the defendant 

make restitution to the Social Security Administration. 

(2) Sections 3612, 3663, and 3664 of title 18, United States Code, 

shall apply with respect to the issuance and enforcement of orders 

of restitution under this subsection. In so applying such sections, the 

Social Security Administration shall be considered the victim. 

109

(3) If the court does not order restitution, or orders only partial 

restitution, under this subsection, the court shall state on the record 

the reasons therefor.

ø(b)¿ (c)(1) * * *

* * * * * * *

SECTION 302 OF THE TICKET TO WORK AND WORK 

INCENTIVES IMPROVEMENT ACT OF 1999

SEC. 302. DEMONSTRATION PROJECTS PROVIDING FOR REDUCTIONS 

IN DISABILITY INSURANCE BENEFITS BASED ON EARNINGS. 

(a) * * *

* * * * * * *

(c) WAIVERS.—The Commissioner may waive compliance with the 

benefit provisions of title II of the Social Security Act ø(42 U.S.C. 

401 et seq.),¿ (42 U.S.C. 401 et seq.) and the requirements of section 1148 of such Act (42 U.S.C. 1320b–19) as they relate to the 

program established under title II of such Act, and the Secretary 

of Health and Human Services may waive compliance with the 

benefit requirements of title XVIII of such Act (42 U.S.C. 1395 et 

seq.), insofar as is necessary for a thorough evaluation of the alternative methods under consideration. No such project shall be actually placed in operation unless at least 90 days prior thereto a written report, prepared for purposes of notification and information 

only and containing a full and complete description thereof, has 

been transmitted by the Commissioner to the Committee on Ways 

and Means of the House of Representatives and to the Committee 

on Finance of the Senate. Periodic reports on the progress of such 

projects shall be submitted by the Commissioner to such committees. When appropriate, such reports shall include detailed recommendations for changes in administration or law, or both, to 

carry out the objectives stated in subsection (a). 

* * * * * * *

ø(f ) EXPENDITURES.—Expenditures made for demonstration 

projects under this section shall be made from the Federal Disability Insurance Trust Fund and the Federal Old-Age and Survivors Insurance Trust Fund, as determined appropriate by the 

Commissioner of Social Security, and from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Medical Insurance Trust Fund, as determined appropriate by the Secretary of 

Health and Human Services, to the extent provided in advance in 

appropriation Acts.¿

(f) EXPENDITURES.—Administrative expenses for demonstration 

projects under this section shall be paid from funds available for 

the administration of title II or XVIII of the Social Security Act, as 

appropriate. Benefits payable to or on behalf of individuals by reason of participation in projects under this section shall be made 

from the Federal Disability Insurance Trust Fund and the Federal 

Old-Age and Survivors Insurance Trust Fund, as determined appropriate by the Commissioner of Social Security, and from the Federal 

Hospital Insurance Trust Fund and the Federal Supplementary 

Medical Insurance Trust Fund, as determined appropriate by the 

110

Secretary of Health and Human Services, from funds available for 

benefits under such title II or XVIII.

INTERNAL REVENUE CODE OF 1986

Subtitle A—Income Taxes 

* * * * * * *

CHAPTER 2—TAX ON SELF-EMPLOYMENT 

INCOME 

* * * * * * *

SEC. 1401. RATE OF TAX. 

(a) * * *

* * * * * * *

(c) RELIEF FROM TAXES IN CASES COVERED BY CERTAIN INTER- NATIONAL AGREEMENTS.—During any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, the self-employment income of an individual shall be exempt from the taxes imposed by 

this section to the extent that such self-employment income is subject under such agreement øto taxes or contributions for similar 

purposes under¿ exclusively to the laws applicable to the social security system of such foreign country. 

SEC. 1402. DEFINITIONS. 

(a) NET EARNINGS FROM SELF-EMPLOYMENT.—The term ‘‘net earnings from self-employment’’ means the gross income derived by an 

individual from any trade or business carried on by such individual, less the deductions allowed by this subtitle which are attributable to such trade or business, plus his distributive share 

(whether or not distributed) of income or loss described in section 

702(a)(8) from any trade or business carried on by a partnership 

of which he is a member; except that in computing such gross income and deductions and such distributive share of partnership ordinary income or loss—

(1) * * *

* * * * * * *

(5) if—

(A) any of the income derived from a trade or business 

(other than a trade or business carried on by a partnership) is community income under community property 

laws applicable to such income, øall of the gross income 

and deductions attributable to such trade or business shall 

be treated as the gross income and deductions of the husband unless the wife exercises substantially all of the 

management and control of such trade or business, in 

which case all of such gross income and deductions shall 

be treated as the gross income and deductions of the wife; 

and¿ the gross income and deductions attributable to such 

trade or business shall be treated as the gross income and 

deductions of the spouse carrying on such trade or business 

111

or, if such trade or business is jointly operated, treated as 

the gross income and deductions of each spouse on the 

basis of their respective distributive share of the gross income and deductions; and

* * * * * * *

Subtitle C—Employment Taxes 

* * * * * * *

CHAPTER 21—FEDERAL INSURANCE 

CONTRIBUTIONS ACT 

* * * * * * *

Subchapter A—Tax on Employees 

* * * * * * *

SEC. 3101. RATE OF TAX. 

(a) * * *

* * * * * * *

(c) RELIEF FROM TAXES IN CASES COVERED BY CERTAIN INTER- NATIONAL AGREEMENTS.—During any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, wages received by or 

paid to an individual shall be exempt from the taxes imposed by 

this section to the extent that such wages are subject under such 

agreement øto taxes or contributions for similar purposes under¿

exclusively to the laws applicable to the social security system of 

such foreign country. 

* * * * * * *

SEC. 3102. DEDUCTION OF TAX FROM WAGES 

(a) REQUIREMENT.—The tax imposed by section 3101 shall be collected by the employer of the taxpayer, by deducting the amount 

of the tax from the wages as and when paid. An employer who in 

any calendar year pays to an employee cash remuneration to which 

paragraph (7)(B) of section 3121(a) is applicable may deduct an 

amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of 

such remuneration paid to the employee by the employer in the calendar year is less than the applicable dollar threshold (as defined 

in section 3121(x) for such year; and an employer who in any calendar year pays to an employee cash remuneration to which paragraph (7)(C) or (10) of section 3121(a) is applicable may deduct an 

amount equivalent to such tax from any such payment of remuneration, even though at the time of payment the total amount of 

such remuneration paid to the employee by the employer in the calendar year is less than $100; and an employer who in any calendar 

year pays to an employee cash remuneration to which paragraph 

(8)(B) of section 3121(a) is applicable may deduct an amount equivalent to such tax from any such payment of remuneration, even 

though at the time of payment the total amount of such remuneraVerDate Jan 31 2003 19:39 Mar 27, 2003 Jkt 019006 PO 00000 Frm 00111 Fmt 6659 Sfmt 6601 E:\HR\OC\HR046.XXX HR046
112

tion paid to the employee by the employer in the calendar year is 

less than $150 øand the employee has not performed agricultural 

labor for the employer on 20 days or more in the calendar year for 

cash remuneration computed on a time basis¿; and an employer 

who is furnished by an employee a written statement of tips (received in a calendar month) pursuant to section 6053(a) to which 

paragraph (12)(B) of section 3121(a) is applicable may deduct an 

amount equivalent to such tax with respect to such tips from any 

wages of the employee (exclusive of tips) under his control, even 

though at the time such statement is furnished the total amount 

of the tips included in statements furnished to the employer as 

having been received by the employee in such calendar month in 

the course of his employment by such employer is less than $20. 

* * * * * * *

Subchapter B—Tax on Employers 

* * * * * * *

SEC. 3111. RATE OF TAX. 

(a) * * *

* * * * * * *

(c) RELIEF FROM TAXES IN CASES COVERED BY CERTAIN INTERNATIONAL AGREEMENTS.—During any period in which there is in effect an agreement entered into pursuant to section 233 of the Social Security Act with any foreign country, wages received by or 

paid to an individual shall be exempt from the taxes imposed by 

this section to the extent that such wages are subject under such 

agreement øto taxes or contributions for similar purposes under¿

exclusively to the laws applicable to the social security system of 

such foreign country. 

* * * * * * *

Subchapter C—General Provisions 

* * * * * * *

SEC. 3121. DEFINITIONS. 

(a) WAGES.—For purposes of this chapter, the term ‘‘wages’’

means all remuneration for employment, including the cash value 

of all remuneration (including benefits) paid in any medium other 

than cash; except that such term shall not include—

(1) * * *

* * * * * * *

(7)(A)***

(B) cash remuneration paid by an employer in any calendar 

year to an employee for domestic service in a private home of 

the employer (including domestic service ødescribed in subsection (g)(5)¿ on a farm operated for profit), if the cash remuneration paid in such year by the employer to the employee for 

such service is less than the applicable dollar threshold (as defined in subsection (x)) for such year; 

* * * * * * *

113

(g) AGRICULTURAL LABOR.—For purposes of this chapter, the 

term ‘‘agricultural labor’’ includes all service performed— (1) * * *

* * * * * * *

(5) on a farm operated for profit if such service is not in the 

course of the employer’s trade or business øor is domestic service in a private home of the employer¿. 

* * * * * * *

Æ